Nano Forex account: definition, how it works, pros and cons and opening

A nano lot in Forex trading is a unit of currency representing 100 units of the base currency. It’s among the smallest tradable lots available in the Forex market, making it ideal for beginners or those with limited capital.

For example, if a trader decides to trade a nano lot in the EUR/USD currency pair, they are effectively trading 100 euros. With a Standard lot, they would be trading 100,000 euros.

In Forex trading, with nano lots, a pip is typically worth 1 cent, or $0.01. This value is derived from the small size of the nano lot, which is 100 units of the base currency.

For instance, if a currency pair moves 20 pips in the trader’s favour, the gain would be just $0.20 with a nano lot.

Nano accounts are known to offer forex trading in nano lots.

This feature is rare to find in other forex trading account types, as the only other account type catering it is the Cent account.

Here below you can find a table comparing nano, standard, mini, micro and cent accounts:

Forex nano accounts differ from standard accounts mainly in their lower minimum deposit requirements, typically below $10, and the ability to trade in nano lots with small amounts of money.

However, they often incur higher transaction fees, sometimes double that of standard accounts. Additionally, nano accounts may limit access to certain asset classes like cryptocurrencies and exotic foreign exchange currencies, which are usually available in a standard account.

Forex nano and mini-micro accounts are quite similar, especially in terms of their low minimum deposit requirements and fee structures.

The key difference lies in the trading volume: nano accounts allow for positions in nano lots, which are smaller than the low-volume orders permitted in a mini-micro account. While both account types generally offer similar asset availability, mini-micro accounts tend to be slightly more flexible in this regard.

The primary distinction between Forex nano accounts and cent accounts lies in how they represent account equity and trading volumes.

Nano accounts enable trading in nano lots, allowing for very small volume orders where 1 pip difference in price equals 0,001$. In contrast, a cent account, while also permitting small volume orders including nano lots, display the account equity and trading volumes in cents.

This representation in cents can make cent accounts seem more tangible or relatable, especially for small-scale traders.

Despite their differences in presentation, both account types cater to traders interested in operating with minimal financial commitment.

Nano accounts offer traders the chance to trade using nano lots for a lower-risk trading environment.

Additionally, these accounts do not only offer nano lots, but rather a whole set of features that make low-volume trading possible, such as a low initial deposit requirement. This aspect makes nano accounts particularly beneficial for beginner traders, as they serve as an ideal platform for learning and experimenting in the trading realm, all while substantially limiting the risk of major financial losses.

No, you cannot trade standard lots in a Forex nano account.

These accounts are designed for very low volume trading, with the maximum lot size being around 1 micro lot, or 0.01 standard lots. Nano accounts cater specifically to traders looking to operate with minimal financial commitment.

However, if your equity exceeds a certain threshold, determined by the broker, they may upgrade your nano account to a standard account, which allows for larger lot sizes and broader trading opportunities.

Leverage in a Forex nano account works similarly to other trading accounts.

However, nano accounts typically offer higher leverage, often exceeding 1:100. Despite this, leverage limits are still enforced in certain jurisdictions. For example, in the EU, UK, and Australia, regulatory constraints limit the maximum leverage to 1:30.

Are margin requirements different in a Forex nano account?

The margin requirements for nano accounts work the same way as other forex trading accounts, however, the money needed to open trading orders is lower.

For instance, while a standard account may necessitate a $1,000 margin for trading a standard lot, a nano account often requires just a $10 margin.

However, assuming a 1:30 leverage for nano and standard forex accounts, each would need a 3.33% margin to initiate trades. In other words, in a standard account you will need $33 (3,33% of $1000), while only $0.33 in a nano account (3,33% of $10).

Forex nano accounts typically charge higher fees compared to standard accounts, including spreads and commissions.

These higher fees are a trade-off for the ability to trade in much smaller lot sizes. In fact,  nano accounts often have spreads above 1 pip, while spreads in other account types are usually below 1 pip.

Additional trading fees in nano accounts include overnight fees and currency conversion fees.

Compared to other account types, nano lot accounts never come with raw spreads, nor with additional commissions based on trading volume.

Yes, nano accounts are a good middle ground between demo accounts and standard accounts, making them suitable for beginner Forex traders.

Here are 5 reasons why nano accounts are good for beginners:

• Low Minimum Deposit: The low minimum deposit required in nano accounts is beneficial for beginners as it enables them to trade with real money while minimizing the risk of large capital losses. This feature helps in acclimatizing traders to the dynamics of real money trading.
• Small Lot Sizes: Unlike standard accounts that typically need at least $200 to operate effectively, nano accounts can function optimally with much smaller amounts due to the use of nano lots. This makes it more feasible for beginners to start trading.
• Learning Opportunity: Nano accounts offer a practical platform for newcomers to learn Forex trading, requiring less financial commitment compared to larger accounts. This learning environment is ideal for gaining hands-on experience.
• Psychological Training: While virtual funds can be useful for understanding the analytical side of Forex, they don’t offer experience in managing the psychological pressures of trading. Nano accounts, which involve real funds, provide a more comprehensive training experience, including the emotional aspects of trading.
• Gradual Transition: Nano accounts serve as an excellent intermediary step for beginners, offering a smooth transition from virtual trading with simulated funds to trading in real market conditions with actual money. This gradual progression is crucial for building confidence and experience.

This  is why this account type is featured on many forex brokers for beginners.

Pros:

• Low minimum deposit
• Small lot sizes
• Reduced financial risk
• Ideal for learning and practicing
• Accessible to beginners

Cons:

• Higher transaction fees
• Limited trading assets
• Lower profit potential
• May not be suitable for experienced traders
• Limited leverage in some jurisdictions

The best nano lot forex brokers are FBS, XM and Oanda.

These Forex brokers permit trading in nano lots at competitive fees and enable traders to open accounts with minimum deposits of less than $10.

No, not all Forex brokers offer nano accounts

Nano accounts are actually a rare feature to find in the forex industry. The rarity of nano accounts is primarily attributed to their lower profitability for brokers, stemming from small user deposits and reduced trading volumes that yield minimal spread gains. Additionally, these accounts require a specific infrastructure, which escalates management costs.

To offset these drawbacks, Nano accounts typically impose higher fees and offer a more restricted selection of tradable assets. As a result, the best forex brokers often choose to offer alternative account types, like mini or micro accounts, which are similar yet distinct from Cent accounts.

The forex trading platforms that typically support nano accounts are mainly MetaTrader 4 (MT4), MetaTrader 5 (MT5), or proprietary trading platforms offered by specific brokers.

Opening a Forex nano account involves 5 steps:

1. Choose a nano forex broker: Choose a nano lot broker that meets your trading needs, especially if you’re looking for specific features.
2. Register an account: Provide the broker with a few basic information, such as an email address and an username. Sometimes, the broker will also ask you to provide a phone number.
3. Verify your identity: Every forex broker will ask you to verify your trading account before depositing real money. This process, known as KYC, consists in submitting documents like a government-issued ID, proof of address (like a utility bill or bank statement), and possibly other verification documents.
4. Fund your nano account: The first deposit should always match or be higher than the broker’s minimum deposit required for the nano lot account.
5. Setup the trading platform: Choose your desired forex trading platform, among those compatible with the nano lot account. Typically, you will be able to choose between MT4, MT5 or the broker’s proprietary trading platform.

To open a forex mini-micro account, there are three key criteria that must be met, similar to the requirements of other trading accounts:

• Minimum Deposit: Typically, these accounts require a minimum deposit of $10. However, the specific amount might differ based on the brokerage firm you choose. This implies that you need to deposit at least $10 to start trading with a nano account.
• Age Requirement: Trading accounts are not available to minors. Therefore, you must be at least 18 years old to open an account. Any attempt to register by an underage individual will be declined during the identity verification process.
• Identity Verification: For compliance with international regulations, it’s essential to furnish your forex broker with recognized identification documents, such as a passport, and a document confirming your address, such as a utility bill or a bank statement.