November 30, 2007, Newsletter Issue #30: Forex Minimum Investment Requirement

Tip of the Week

Forex minimum investment requirements vary according to the broker or brokerage firm you are using for investment purposes. Some brokers have a minimum opening balance and trade size that are fairly low, while others exceed tens of thousands of dollars.

The following is a list of some popular brokerage firms with a forex minimum investment requirement amount lower than $500 (U.S.). Each one of these firms is registered with NFA and CFTC. Please note that this is not a suggestion to choose any brokerage firm. Instead, this list is just to inform you of the choices available. Please note that most brokerage firms have a Forex minimum investment requirement of more than $2,500.

FX Club has a forex minimum trade requirement of 10 USD. This is a great place to start trading in forex for several reasons. First, they are registered with governing bodies. Second, the leverage is 100:1, so a $10 investment means you control trades of $1,000. The pips are fairly low for a brokerage firm with such low minimum trades. Their pips run as low as 3 and as high as 15 based on the currency pair. This is a tight spread which means you have greater potential for profits. The company has also been active since 2005, so you have the benefit of tenured and reliable brokers helping you trade. If you want to try the market out, FX Club is offers $100 cash investment incentive, which means that you have real money to play the forex market with and since they offer a 100:1 leverage, you are really playing the forex market with $1,000. With the incentive account you cannot withdraw the $100 incentives, but you can withdraw any profits made from the incentives in cold, hard cash. FX Club is probably the best place to start for forex beginners. It is also a great opportunity for intermediate and advanced traders.

MG Financial Group has a forex minimum investment requirement of 200 USD. This is also a low minimum initial investment. MG offers leverage spreads at 400:1. This means that a $200 investment is really controlling $80,000. Pips run as low as 3 to 5 and much higher. Furthermore, MG has been in the industry since 1992. MG allows for a free demo account, but unlike FX Club this is simply a demo account with ‘fake' money. It is used for experience and practice purposes only.

IFX Markets has a forex minimum investment requirement of 500 USD. This is also fairly low, comparatively speaking. IFX has been in the financial service industry since 1933, and incorporated forex trading platforms in 1995. This is one of the most tenured forex trading brokerage firms available. They also have pip spreads set at 2 to 3 pips with up to 100:1 leverage (not guaranteed leverage). The leverage with IFX is based on the amount you are investing, so unlike FX Club and MG Financial, the leverage amount is highly variable. Interestingly enough, IFX Markets does have a broker commission of 1.25 per lot transaction. This is likely because the leverage is variable and the pips are tighter than most other broker firms. The brokerage firm has to generate income from some source, and so this one chooses brokerage commissions. They also offer a free demo account. However, unlike FX Club this is only a demo account and you will not have the opportunity to withdraw any profit. IFX does give away monthly prizes up to $3,000 cash for the demo account.

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Exclusive Sponsor

Greetings,

Forex Club is excited to announce a special program. When you open a new trading account we will deposit $100 on it to help you to get started with Forex trading. Since there are no fees to open an account, in essence, this means that you can start actual forex trading without spending a single dollar. Sounds like a pretty good deal, does not it? This is way better than a demo account. You can find out details about this promotion program here: http://www.fxclub.com/incentive

Thank you for your interest and good luck!
Forex Club, New York

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