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What is a LOT in Forex And How Its Used For Trading?

 

The Informed Trader Series: 

BITE -SIZED LEARNING FOR NEW TRADERS

Currency pairs are traded in pairs. We know that by now.

While placing your trade, the broker platform will ask you about "How many lots do you want to trade with"?

“LOTS” represents the amount that you are buying or selling. Think of it like kilos, or pounds when you are buying vegetables or litres when you are buying gas/petrol for your car..

In the trading world, Lots are the amount you want to buy or sell.

The three most common types of lots are :

 STANDARD . MINI .MICRO

 One standard lot =100,000 units of the base currency,

Example: 1 lot of EURUSD would be equal to 100,000 euros.

One mini lot = 10,000 units of the base currency Example:  1 mini lot of GBPUSD would be equal 10,000 British pounds.

1 micro lot is equal to 1,000 units of the base currency in your currency pair. Example: 1 micro lot of AUD/USD is equal to 1,000 US Dollars. Now, you don't have to have 100000 to trade because you can use leverage ?

What is leverage.. Stay tuned for the next blog.

Sanchaita   

"The most important investment you can make is educating yourself."- Warren Buffett

IF YOU WOULD LIKE TO LEARN HOW TO TRADE THE FOREX MARKET OR ENHANCE YOUR TRADING JOURNEY, THEN THIS IS A GOOD PLACE TO START.
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