Have you had a look at the XM forex broker offer and didn't quite understand the difference between Standard and Micro accounts?
Don't worry, it's a difference that doesn't immediately jump out at you, but it opens up strategic advantages, as we will see in this article. Above all, it's a difference that you can't verify with the XM broker demo, as the demo only simulates the Standard account.
The dynamics of the Standard account are the same as the Micro account, only the initial margin required for each transaction changes.
XM demo account: why not show the difference?
This is not a lack of a broker. The XM demo account is only available as a simulation of the Standard account because the two different types of accounts do not differ at all either in terms of the offer of securities or the tools available.
Unlike FBS broker demo, XM's simulation has no time limit, but the broker expects the account to close after 30 days of inactivity.
This is a definitive measure as even if your account is closed due to inactivity, you could still open another one.
Ultimately XM does not provide two different demo accounts for its Standard and Micro offer as there is no significant difference for a simulation.
Standard and Micro accounts: a subtle difference
Going to read roughly the offer we know that XM is not one of the ECN brokers, as it allows you to trade with the Spread, at zero commission.
Both account types have a very different minimum deposit from eToro, just 5€ (the minimum deposit of eToro, in case you are wondering, is 200€). However, we will see that, as far as the Standard account is concerned, 5€ is insufficient to open even one position.
The table provided by the site shows that the Standard account allows you to trade on 0.01 starting lots. Likewise, the Micro account will enable you to trade on 0.01 starting lots if you choose the MetaTrader4 platform. If you decide MetaTrader5, you can trade on 0.1 starting lots.
So where is the difference nested?
Starting Lot: Standard vs Micro
The two accounts differ, and even by a lot, as soon as you go to consider the starting lot, the minimum trade size is measured.
For the Standard account, the starting lot is standard, equivalent to about 100,000 units of the base currency.
This means that the initial margin, which is the money you need to have deposited to open an investment, taking into account a 30:1 leverage, is about €33.33.
It is now clear that with the minimum deposit you can do practically nothing in the Standard account.
The Micro account, however, does not start from a whole lot but a micro lot, equivalent to one thousand units of the base currency.
Bearing in mind that when you trade with MetaTrader4, you are investing on one-hundredth of a starting lot, the initial margin to trade with 30:1 leverage is only €0.33.
If you trade with MetaTrader5, the initial margin required will be 3.33€.
In both cases, you can open at least one position with a minimum deposit of 5€.