What are the advantages of having multiple Forex accounts?

There are many traders who use more than one Forex account at a time. When you first hear about it, it may not make much sense since having to manage multiple trading accounts could cause confusion and require you to waste energy because of the added effort it takes to switch between them constantly.

 

However, they actually have a number of advantages if you know how to properly use them.

 

There are many Forex brokers available online and not all of them are the same. By having accounts with several brokers, you can begin to compare which one delivers the best trading experience and feel safer committing to it. Brokers also differ in the services they offer including the currency pairs that you are allowed to trade and the spreads they offer on them. In this case, holding multiple accounts is necessary if you plan to open positions in exotic pairs, want to make use of a specific technical indicator, or to ensure you get the best value for your money.

 

Another way multiple accounts can help is by allowing you to focus on specific strategies.  While there is nothing keeping you from experimenting on using all kinds of trading tactics on a single account, this can quickly get disorganized and make reviewing your trades more difficult. By dedicating one strategy to one account, it becomes easier to assess its effectiveness since the account’s statistics are not muddied by the results of trades made for different plans.

 

A third reason is to reduce the chance of losing your investment should a broker suddenly close or a trade go horribly wrong. Distributing your deposits across several accounts ensures that you will always have funds to trade with and you could even use them to hedge your riskier trades.

 

Considering that both Forex brokers and Forex accounts are now significantly easier to find and open, more and more traders are learning to take advantage of multiple accounts. It may not be necessary to be successful, but it does have benefits that help towards improving your chances of making profits on the market.