It is therefore necessary to take positions on thousands or hundreds of thousands of units of money if you want to generate significant profits.
A lot is a standard unit of measurement used to quantify the amount of trading in Forex.
The size of a standard contract currency is 100,000 units of the base currency. This amount is in this case a lot.
On Forex, we find mainly four categories of items:
– The standard lot that is 100,000 units
– The mini lot is equivalent to 10 000 units
– The micro lot is 1000 units
– The nano-lot is 100 units
Consider an example where the unit of currency of the lot is the dollar (the dollar is now the base currency).
If an investor buys a standard lot of EUR / USD at 1.3920, he bought € 100,000 worth 1.3920 X 100,000 = $ 139 200. The goal is to sell when 100 € 000 will be worth more than $ 139,200.
If an investor buys a mini lot of GBP / USD at 1.3920, he bought € 10,000 worth 1.3920 X 10,000 = $ 13 920. The goal is to sell when the € 10,000 will be worth more than $ 13 920.
If an investor buys a micro lot of GBP / USD at 1.3920, he bought € 1000 for a value of 1.3920 X 1000 = $ 1392. The goal is to sell when the € 1,000 will be worth more than $ 1392.
If an investor buys a nano-lot of GBP / USD at 1.3920, he bought € 100 worth 1.3920 X 100 = $ 139.2. The goal is to sell when the € 100 will be worth more than $ 139.2.
For most listings between currencies, the lot report mentioned above is the standard norm.
Originally posted 2013-09-18 09:12:32. Republished by Blog Post Promoter