Which account?


There is a profusion of account types offered by an even more plentiful profusion of brokers. If you have selected the right broker according to the previous section, now it is the time to check if the broker you have selected is offering the right account.

 

The right trading account is a crucial part in securing a safe and profitable trading. Indeed trading conditions are the game's rules and are truly what determined whether a trading account is winnable or not. It is fairly similar to a card game for which you need to know which cards are the good cards and which strategy is the good strategy. It is the game's rules that will make the difference between winning or loosing. Therefore you need to select the account type carefully.

 

Below are three tables summing up the parameters you need to check in order to select an appropriate trading account.

 

> In bold are the elements with higher importance.

> The mention "Does not matter" means that the impact of the parameter on the overall performance of Captain Algorithm is marginal - in the extent to which the value of such parameter remains within the range of what is commonly offered by brokers.

> Usually broker will present an even more numerous set of parameters or options in the specification of the accounts. However those parameters can be overlooked - unless of course if such parameters introduce some unusual disadvantageous trading clauses.

> The cornerstone rule being to always choose the account type according to the equity with which you intend to start trading.

> Sometimes it is easier to search for the appropriate account first before searching for the right broker offering it. Finding the right account can be achieved by searching on notable Forex review websites - particularly when filtering option is available.


IMPORTANT

 

> At equal equity Standard/ECN account will always have a lower rating by Captain Algorithm than Micro (Cent) account for the ratio of the initial equity by the minimum volume of trade allowed is less favorable - the minimum volume of trade allowed being 100 times higher in Standard/ECN accounts than in Micro (Cent) accounts.


> Micro (Cent) account will always be safer but not necessarily more profitable because the spread levels are generally not as good as Standard/ECN accounts.

 

> There are two main types of Standard accounts :

  1. Non-ECN accounts : in a non-ECN trading account your trades will be processed by the broker. Your wins or losses will be handled by the broker. Non-ECN accounts are generally offered with various promotions and advantages (such as equity bonus, direct tradable rebates, no commission, etc.). So non-ECN accounts may make sense economically because of the promotions offered although the trading conditions (mainly the spread level) are not as good as in ECN accounts. Non-ECN accounts will generally come with a contractual negative balance protection i.e. the negative balance protection is stipulated in the user agreement contract.
  2. ECN accounts : in a ECN (Electronic Communications Network) your trades are directly passed out to the broader market and you will be trading with other traders and financial institutions. ECN accounts are accounts that are the closest to real professional trading conditions. The spread level is very competitive since you have direct access to the market. You will not have a contractual negative balance protection but you can still enjoy a programmatic negative balance protection by using Captain Algorithm i.e. Captain Algorithm will automatically close all positions when the margin level of your trading account is below a certain threshold (but you have no warranty that the closing positions will be met in the broader market).

> Captain Algorithm will perform much better on an ECN account due to the lower spread and faster execution even when taking into account the commission paid for each trade. Captain Algorithm on an ECN account will significantly benefit from a better hardware. Thus ECN account is particularly suitable for large investor.

 

> You will need to make a trade-off between non-ECN or ECN accounts based on your own needs. A non-ECN account that offers a 100% or 50% tradable equity bonus is very much welcomed since it will increase substantially your initial equity (making your account safer and potentially more profitable). If you are trading stocks, a contractual negative balance protection is also very welcomed since stocks may encounter liquidity issues.

 

CASHBACK

 

> Most of the brokers offer a cashback scheme either directly or through a third party. Cashback scheme is a monetary reward scheme based on the volume you have traded monthly i.e. the more you trade the more cashback you will receive - directly to your trading account or to your PayPal account.

 

> For a trading account using Captain Algorithm, this is a boon not to be missed. Cashback scheme can add a sizable amount of extra revenues to your trading with Captain Algorithm particularly with Micro (Cent) accounts.

 

> Captain Algorithm is offering two options for you to enjoy cashback :

  1. Cashback by Captain Algorithm (with additional benefits such as Free subscription or Free upgrade).
  2. Cashback with our cashback provider partner.

> For more information about cashback, please click here.