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Tech Analysis : USD/CHF
Tech Analysis : USD/CAD
Tutorial : What is Cross Currency?
Tutorial : What is PIP?
Tutorial : What is Forex Trading?
Tutorial : What are Currency Values?
Tutorial : What is Bid price and Ask price?
Tutorial : What is Spread?
Tutorial : How to get started?
Tutorial : What are the types of Orders?
Tutorial : What is Lot size?
Tutorial : What is Long and Short trade?
Tutorial : What is Leverage?
Tutorial : What is Margin Balance?
Tutorial : What is Rollover?
Tutorial : When do the deals liquidate?
Tutorial : How to analyze forex market?
Tutorial : What are Forex Signal Services?
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Lot
When you buy and sell a currency pair, you don't do so for a single unit of the base currency. The currencies are traded in lots. There are three types of lots used commonly depending upon the type of forex account that you have opened. These are:
- Standard Lot: 1 lot = 100,000 units
- Mini Lot: 1 lot = 10,000 units
- Micro Lot: 1 lot = 1,000 units
A beginner may want to open a mini account where he/she may have mini or micro lots to trade with. These accounts typically need $200 to $1000 to start with. The standard lots can be traded with larger accounts.
In a micro lot, the profit/loss will be $0.10 per pip. In a mini lot, the profit/loss will be $1 per pip, whereas in a standard lot the stake is of $10 per pip. So, the smaller the lot size, smaller will be the profit but also the loss. Hence, the reason why beginners prefer to start with mini lot or may be even micro.
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