Choosing a forex broker cannot be done rashly. There are many considerations that need to be taken into account, one of which is suitability for the trading strategy. For short-term traders who are fans of scalping strategies, the most preferred ones are usually 5-digit cent brokers. Why does it have to be a cent account and 5-digit pricing?
Cent and 5 Digit Account Collaboration
Some of the best qualities in brokers for scalping are tight spreads, accuracy of execution, and allowing scalping. In this case, 5-digit pricing can offer more accurate execution and tighter spreads than that of 4-digit quotes.
For example, the current Bid and Ask EUR/USD prices are 1.2210 and 1.2212 at a 4-digit broker. Meanwhile, the 5-digit broker displays the Bid and Ask EUR/USD prices in the range of 1.22105 and 1.22122. The spread charged by the 4-digit broker is 2 pips, while the 5-digit broker only charges 1.7 pips.
A difference of 0.3 pips may not seem too significant for most traders, but for scalpers whose profit targets are only between 5-15 pips per day, a difference of 0.3 pips can certainly make a huge change. What's more, they usually open many positions in a day. Imagine if in just one day there were at least 5 positions opened. Scalpers who trade with 4-digit brokers can lose up to 1.5 pips every day.
Then what about cent accounts? Basically, this type of account uses a base currency of cents which is one hundredth less than the usual base currency. So, the transaction value used to open a position in this account will also shrink. One standard lot on a normal account will be worth $100,000, but on a cent account, it will only be worth 100,000 US cents or $1,000.
If the above convenience is combined with 5-digit pricing, the risk of scalping will be much reduced. There is no need to question the issue of minimal profits, as the main target of scalping is to obtain small but frequent profits after all.
Examples of 5-Digit Cent Account Brokers
Even though it can help traders with small capital and is useful for scalpers, cent accounts are still rarely offered by forex brokers.
This is inversely proportional to the 5-digit feature which has been found in many brokers these days. In fact, it is believed that this pricing system will become increasingly widespread in the future because 5 digits indicate the development of global transactions which will definitely become a benchmark for all market players.
Not all 5-digit brokers offer cent accounts, and not all cent account brokers can provide them with 5-digit precision. InstaForex is an example that both have cent and 5-digit account features. However, due to their policies, the 5-digit feature is not activated on cent accounts, so they cannot be referred to as a 5-digit cent broker.
Therefore, the following list will present a selection of forex brokers that can facilitate 5-digit quotes in cent accounts:
1. Exness
Exness is a 5-digit cent account broker that applies the same pricing system to all account types. This means that the 5-digit price condition at the Exness broker does not only apply to cent accounts. You can register a Cent account with a minimum deposit of $10, and choose a maximum leverage of 1 to Unlimited. For spreads, Exness cent account sets a minimum range of 0.3 pips.
All these conveniences are further optimized with the 0.01 cent lot, which, if adjusted to the normal lot count, is equivalent to a 0.0001 lot. Unfortunately, this broker only provides forex instruments in its cent account.
2. RoboForex
RoboForex is a choice of 5-digit cent account brokers that has a multitude of attractive trading facilities, starting from various trading platforms, Copy Trading, free VPS, automatic trading signals from MetaTrader, and many more. Through the Pro-Cent account, RoboForex delivers you the best conditions for scalping with floating spreads and Market Execution. The minimum deposit requirement is set at $10, and leverage can be selected between 1:1 to 1:2000.
3. JustMarkets
This 5-digit cent account broker offers 4 trading account types on MT4 and 3 accounts on MT5. JustMarkets provides cent accounts with a maximum leverage of 1:3000 on MT4, Zero Spread starting from 0.3 pips, and a minimum trading size of 0.01 cent lots. However, because it is introduced as an account for beginners, there are limitations that scalpers need to pay attention to, one of which is the maximum limit of 100 orders. With these specifications, you can enjoy Market Execution, swap free, and no commission trading.
4. LiteFinance
When discussing cent accounts, the role of LiteFinance almost never escapes the spotlight. This is because this broker pioneered the cent account in the retail forex industry. This broker does not broadcast its pricing system on the main site, but upon being contacted via Live Chat, they stated that all trading accounts are provided with 5-digit pricing.
LiteFinance cent account leverage is available up to 1:1000, with a minimum deposit starting from just $10. Apart from that, the execution model used is Market Execution. Liteinance also applies maximum limits to the number of ordes to prevent the risk of overtrading for beginners on cent accounts.
5. AGEA
Compared to previous forex brokers, the choice of AGEA trading accounts is not very diverse. The broker has been around since the early 2000s, but they only present 4 account types, and 5-digit Cent is one of them. To be able to open this account, the minimum deposit required is $10. The maximum leverage condition is 1:100, and the lowest lot size on AGEA cent accounts is 0.01.
What you really need to pay attention in this broker is a maximum limit of $5000 for the amount of balance. So if later you have traded and succeeded in accumulating a balance higher than $5000, you can withdraw funds gradually before the balance reaches the limit.
End Words
Trading on a 5-digit cent account broker can optimize risk management in scalping strategies, which are often carried out at high frequency. However, because cent accounts were basically launched to support novice traders, there are limitations that scalpers need to be aware of.