Major Types Of Forex Lot Size, You Should Know This.

[Nancy parez]

There are four main types of lot sizes you will come across when trading in the forex market, namely: standard lot, mini lot, micro lot, and nano lot.

1. Standard Lot

A standard lot corresponds to 100 000 units of the base currency in a quote of currency pairs. Put in other words, 100 000 units = 1 lot.

For example: Assume you want to buy a standard lot (100 000 units) of GBP/USD. The exchange rate is 1.24, meaning you will pay USD1.24 for one British pound. What will happen is that you will purchase £100 000 with $124 000.

2. Forex trading Mini Lot

The next highest lot from a micro lot is the mini lot.

This was the original "smallest" lot before technology and derivatives took over the forex to bring more people to the markets easily.

The mini lot is 1/10th of a standard lot and has a value of 10,000 units.

This means you will have control over $10,000.

The pip value is around $1 on the EUR/USD, so every time the market goes up or down, you make or lose $1.

3. Micro Lot

A micro lot is 1% of a standard lot (100 000 x 0.01) = 1 000 units of a base currency. Therefore, when you open a trade with a 0.01 lot, you will trade 1 micro lot.

Micro lots are the smallest tradable lot available to most brokers and are a good starting point for beginners.

4. Forex Nano Lot

A nano lot is the name given to a trade size that is 1/1000th of a standard lot.

The value of a nano lot is 100 units, or $100, and is the lowest lot you can trade.

This is where most beginners start when selecting a recommended lot size because the lot value is very low.

In fact, the value of each pip is $0.01, so every up or down movement when trading with a nano lot, you are making (or losing) 1 cent a time.

Most traders set minimum and maximum lot volume for different types of accounts. The top limit is often at 100 lots; the bottom boundary is 0.01 lots. If we take the example above, the minimum investment will be $ 1.184. If you use the leverage 1:100, then a minimum deposit of $11.84 will be enough to start.

However, it will be relevant provided that 100% of the money (which is unacceptable from the point of view of risk management) will be invested in the position. There is a second option - to use cent accounts (if the broker offers cent accounts). The only difference of cent accounts is that the calculations are in cents, not in dollars, so $11.84, in this case, is enough to buy the minimum micro lot without using leverage.

Leverage – How it works

You are probably wondering how can I trade with Lot sizes of 100,000 base units or even 1,000 base units. Well, the answer is very simple. This is available to you from the leverage you have in your account. So let's assume that your account's leverage is set at 100:1. This means that for every $1 used, you're actually trading $100 in the Forex market. In order for you to trade a position of $100,000 then the required margin to open such a position will be $1,000. As for any losses or gains these will be deducted or added to the remaining balance in your account.

 

Thank You

[Hanan Öberg]

My trading lot size is connected to my risk reward ratio; in my live trading I don’t take more than 1% risk on any per trade position (maximum risk)! Usually I take near about 0.5% risk; so I don’t have any fixed lot target in my trading!

[maspluto]

the funds and risks that exist must be able to be considered properly, this is done so that traders can be more leverage in getting maximum trading security and comfort like what I got from Tickmill.

[Resolve]

On 3/22/2022 at 8:15 AM, maspluto said:

the funds and risks that exist must be able to be considered properly, this is done so that traders can be more leverage in getting maximum trading security and comfort like what I got from Tickmill.

We will need to exercise some sort of controls so that the risks will stay at the minimum.

[maspluto]

the funds and risks that exist must be able to be considered properly, this is done so that traders can become more leverage in surviving and can become traders of the month with Tickmill.