For many beginning traders, the idea of holding multiple Forex accounts probably doesn't seem good. Obviously, what is the point in diluting your trading capital between more than one account? Many new traders struggle to get enough starting capital to execute diversified strategies and safe position sizing techniques. Dividing it between several accounts would only hurt in that case.
Despite that obvious disadvantage, there are some reasons to use multiple trading accounts for trading:
- Seeking the best price. In terms of Forex trading, it means finding a broker (or account/platform within one broker) with best spreads or overnight swaps for your strategy.
- Seeking the right trading instrument. It may happen so, that your current broker cannot offer a trading instrument (e.g., some exotic currency pair), but you have a great trading idea for it, so the only solution for you is to open an alternative account.
- Moving to a new broker, but keeping the old account. The cost of moving the whole account may sometimes outweigh the expected advantage of doing so (e.g., if it requires closing some long-term positions). In that case, the new account is funded separately, while the old one remains in use (albeit temporarily).
- Diversification of broker risks. Keeping funds at several brokers may help to save some part of your capital in case of one of your broker's bankruptcy or scam-run.
- Access to live account features. Some companies offer added value services (such as proprietary analysis, online tools, VPS, expert advisors, etc.) to their live account customers. If you keep a trading account with more than one broker, you can potentially reap more of such advantages.
- Separating the strategies. This is best done as separate accounts at the same broker, but this still counts as multiple trading accounts.
- Contest accounts. Trading contests are rare nowadays, but it still a good enough reason to open a separate account, even at a different broker.
An example use-case of multiple accounts in FX trading could be opening four live accounts and managing them this way: one account (AGEA MT4) is for normal Forex trades based on chart pattern analysis, another one (AGEA Streamster) is used for some rare commodity trades, the third account (Exness) is used exclusively for carry trades, and the fourth account (Interactive Brokers) is used for equity trading.
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