What is a Forex lot size?
This is something that might be slightly different from the stock market.
See Also
Pip calculator — OctaDay TradingWhat Is forex trading lot size and How to calculate it?How to Trade Forex with $100: Beginner’s Guide | LitefinanceBecause when you buy 10,000 shares, 100,000 shares, or 5,000 shares, that is pretty much the numbers that you use.
But when you are dealing with Forex…
There is a little bit of terminology that you might want to familiarize yourself with:
- Standard Lot (100,000 Units)
- Mini Lot (10,000 Units)
- Micro Lot (1,000 Units)
- Nano Lot (Below 1,000 Units)
For example...
In a standard lot, it represents 100,000 units of currency.
Let's say you want to buy 100,000 units (one lot) of AUD/USD.
The Aussie against the US dollar is currently at $1.20
What happens is that you will receive 100,000 units of Australian Dollars!
In return, you will fork out (pay) $120,000 US Dollars.
Just to put things in perspective:
- 100,000 Units = 1.00 Lot
- 10,000 Units = 0.10 Lot
- 1,000 Units = 0.01 Lot
- Below 1,000 Units = 0.001 Lot
With that said, I have come to the end of this video and I'll see you in the next.
