Formany beginning traders, the idea of holding multiple Forex accounts probably doesn't seem good. Obviously, what is thepoint indiluting your trading capital between more than one account? Many new traders struggle toget enough starting capital toexecute diversified strategies andsafe position sizing techniques. Dividing it between several accounts would only hurt inthat case.
Despite that obvious disadvantage, there are some reasons touse multiple trading accounts fortrading:
- Seeking the best price. Interms ofForex trading, it means finding abroker (oraccount/platform within one broker) with best spreads orovernight swaps foryour strategy.
- Seeking theright trading instrument. It may happen so, that your current broker cannot offer atrading instrument (e.g., some exotic currency pair), but you have agreat trading idea forit, so theonly solution foryou is toopen analternative account.
- Moving toanew broker, but keeping the old account. Thecost ofmoving thewhole account may sometimes outweigh theexpected advantage ofdoing so (e.g., if it requires closing some long-term positions). Inthat case, thenew account is funded separately, while theold one remains inuse (albeit temporarily).
- Diversification ofbroker risks. Keeping funds atseveral brokers may help tosave some part ofyour capital incase ofone ofyour broker's bankruptcy orscam-run.
- Access tolive account features. Some companies offer added value services (such asproprietary analysis, online tools, VPS, expert advisors, etc.) totheir live account customers. If you keep atrading account with more than one broker, you can potentially reap more ofsuch 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 (RoboForex MT4) is fornormal Forex trades based onchart pattern analysis, another one (RoboForex MT5) is used forsome rarecommodity trades, thethird account (Exness) is used exclusively forcarry trades, and the fourth account (Interactive Brokers) is used for equity trading.
If you want toshare adetailed story ofhow you employ more than one live account inyour Forex trading, please feel free tojoin our community forum for a discussion.
