Understanding Lot Sizes & Margin Requirements when Trading Forex

For each position and instrument we open our broker will specify a required margin indicated as a percentage. Learn more about who trades foreign currencies and why. Do not trade with money you cannot afford to lose. Some examples of lots that you may be familiar with is at the grocery store. Mini lot measurements therefore start from 0.

In the past, spot forex was only traded in specific amounts called lots, or basically the number of currency units you will buy or sell. The standard size for a lot is , units of currency, and now, there are also a mini, micro, and nano lot sizes that are 10,, 1,, and units respectively.

How the heck do I calculate profit and loss?

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So with a lot size 10,, each pip movement is $ profit or loss to us (10,* = $). As it moved upwards by pips we made a profit of $ For example’s sake, if we opened a lot size for , units we would have made a profit of $1, One should know the quantity of different currencies in Forex 1 lot size. In fact, a lot size is a primary factor to learn how to start a trade. Regulatory institutes have set the lot size, and traders have to follow the same to trade. What is a Forex 1 lot? In general, a lot means a group of goods or services. Mini lot measurements therefore start from lots to lots. b) One-hundredths of a Standard Lot, known as the Micro Lot. This is equivalent to a position size of 1, units of the base currency of the account, with a lot size of lots.