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Lot Size
Lot size is the amount of units you sell or buy. if currency gain or lose value of 0.0001 pip, someone with higher lot Size will gain more profit or lose more profit than someone who used low Lot Size. so Lot size is the Quantity you buy or sell.
Units and Lots
To understand lot size lets understand units. anything can can me measure is measured in units. example, units for measuring distance is meters, units for liquid is milliliters, units for time is seconds, you get the idea. when we measure something we consider its smallest unit.
so units for money is cents in many countries. 1 Dollar is made by 100 cents or you can say is made by 100 units
So Lost Size is a group of Units. You cannot say you wanna buy one or few cents, so banks grouped lot of cents or units and called them Lots. so you can buy a Lot which is a group of units or cents
Brokers provide 4 types of Lot Sizes:
a) Standard lot size - is 100,000 units of base currency (is 1 000 USD)
b) Mini lot size - is 10 000 (100 USD)
c) Micro lot size - is 1000 (10 USD)
d) Nano lot sizes - 100 units (1 USD)
a) Standard lot size - is 100,000 units of base currency (is 1 000 USD)
b) Mini lot size - is 10 000 (100 USD)
c) Micro lot size - is 1000 (10 USD)
d) Nano lot sizes - 100 units (1 USD)
When Lots are grouped like this is easy to buy.
The change in a currency value relative to another is measured in “pips,” which is a significantly very small percentage of a unit of currency’s value. To take advantage of this change in value, you need to trade large amounts of a particular currency in order to see a significant profit or loss.
If we use Standard Lot Size (100 000 unit), here is how it affects pip value.
on USDCHF, if Quotes says 1 USD equal 1.4555 CHF, and you make 0.0001 pip profit, here is value of your pip.
( 0.0001 Pip / 1.4555 Exchange Rate) x 100 000 lot size
then 1 pip = $8.34
you would gain or lose $8.34 per pip when currency lose of gain value.
The change in a currency value relative to another is measured in “pips,” which is a significantly very small percentage of a unit of currency’s value. To take advantage of this change in value, you need to trade large amounts of a particular currency in order to see a significant profit or loss.
If we use Standard Lot Size (100 000 unit), here is how it affects pip value.
on USDCHF, if Quotes says 1 USD equal 1.4555 CHF, and you make 0.0001 pip profit, here is value of your pip.
( 0.0001 Pip / 1.4555 Exchange Rate) x 100 000 lot size
then 1 pip = $8.34
you would gain or lose $8.34 per pip when currency lose of gain value.
