Mini ForEx trading is a type of foreign exchange trading which uses smaller lots than those normally used. Mini ForEx trading is usually used by people who are interested in trying out the foreign exchange market, but want their failures to be less costly, so that they can take greater chances. Mini ForEx trading can therefore be looked at as an introduction to more general ForEx trading, a sort of sandbox to experiment in.

ForEx is sometimes further shortened, simply to FX trading. ForEx trading is basically when one party buys a chunk of one currency with a different currency. Currency can therefore be bought and sold like any other commodity, and shifts in the relative value of currencies can therefore be leveraged for profit. The modern ForEx market has its origins in the 1970s, when the world shifted from a fixed exchange rate to a floating exchange rate.

The relative value of currencies shifts quite quickly, and sometimes quite drastically, which means that gains can be enormous over short periods of time, but also that losses can be enormous as well. Because ForEx trading involves the ability to leverage your initial investment to fairly large ratios, these losses and gains can be even larger. Mini ForEx trading helps to rein in this potential somewhat, because the sizes of the shares are much smaller.

Generally speaking, a mini ForEx trading account handles quantities at 1/10th the value of that of a real ForEx account. The trading platforms used are otherwise the same as normal ForEx, however, which means that any skill sets gained while engaging in mini ForEx trading can easily be transferred to larger trades. Leverage can be up to about 200:1, with only around one-half of one percent of the value of the positions held having to be actually on hand for a given transaction. With a lot size of 10,000 base currency, this means that $50 US Dollars (USD) would wind up buying a single lot.

A mini ForEx trading site will also have safeguards in place, to ensure you never stretch beyond your positions. If, for example, the value of the currency falls drastically, bringing you to the limit of being able to cover your lots on margin, the position would be automatically closed at a total loss. In this way, you as a buyer are protected, but it also means that you can lose your entire initial investment on a single position if things go wrong. On the other hand, if currency values shift that drastically in the other direction, a small initial investment can yield a large payout.

The pip changes that occur in mini ForEx trading reflect the value difference between mini and normal trading. A one pip difference in mini ForEx is equal to a shift of $1 USD, as opposed to a shift of $10 USD, as it is in normal trading. Minimum account sizes are correspondingly much less than they would be otherwise, with most services requiring a minimum buy-in of only around $300 USD, with a recommended buy-in of the relatively-small amount of around $2000 USD.