Many new forex traders prefer to start slow with little steps, and that is possible with a mini account. Every broker/dealer that offers a standard account also offers mini account.

NOTE: I do recommend starting with a mini account even if you’re a millionaire.

You can open a mini account with less than $500 and up to $10,000. I suggest your initial investment to be no less than $1000 though — the main reason is that with $250 account balance you can’t even buy a full mini lot. And if you trade with 1/10 of a lot (some brokers will allow you to do that) you’re earnings will be very small (for every 10pips you’d only make a buck) and you’ll be discouraged to continue, therefore you may jump in with more money (and break your money management rules) or just stop trading — either way you’re out of the market.

Mini account doesn’t just mean that you can start with little budget, but also translates into less value per lot. One mini account lot equals 1/10 of a standard lot or 10,000 currency units. This means that it allows you to trade a smaller amount of currencies with smaller minimum deposit.

Example:
EUR/USD is trading at 1.3851 bid price and 1.3853 ask price. You’re leverage is 100:1.

You would need $138.51 to buy 1 mini lot and for which each pip value would be $1.

Mini accounts also offer you higher leverage, so you can control more currency with a lower initial deposit — up to 400:1. Therefore, now with the same amount from the example above you’d control 4 lots or 40,000 currency units and your pip value would be $4.

NOTE: trading with high leverages is very dangerous and this is a trick that brokers use to take your money. So, please don’t trade with a leverage higher than 100:1 and even if you do stick to the 2.5% risk rule form your money management rules.

By using smaller lots, you’ll build your account slowly along with your confidence, this way you’ll be ready to work your strategies on a standard account.