Earlier there was only one specific amount in which the Forex was traded and that is a Lot. A lot is simply a number of currency units that an individual can purchase or sell at a time. As per the statistics available, there is a standard size of lot decided and that is 100,000 units of currency.
Along with the changes in trends, some changes also occurred in Lots and now the Lots are divided into subparts including mini lot, micro lot, and nano lot. The size of Mini Lot is 10,000 units, the size of the micro lot is 1000 unit and the size of the nano lot is 100 units.
LOT NUMBER OF UNITS
- Standard = 100,000
- Mini = 10,000
- Micro = 1,000
- Nano = 100
There are several brokers who usually represent the number of units in Lots while on the other hand there are many brokers who consider showing the quantity in actual currency units. The concept of a lot is very Simple and easy. Lot is basically a bundle of units in a trade.
In simple words “A lot is a size of trading a person is making”. In order to understand Lot, it is necessary to determine about its parts in details. As it is stated that the Lot is divided into 04 subparts that are Standard Lot. Mini Lot, Micro-Lot and Nano Lot.
How much is 1 Lot in Forex Trading?
As per the details available, a standard lot or we can say 1 Lot is equalled to 100.000 units. In other words, if an individual purchased 1 lot of a forex pair that means her purchased 100.000 units from the base currency.
Which Lot should an individual prefer?
If you are new in the Forex trading market then you are recommended to go for the Mini lot, micro lot of the nano lot. It is important to avoid a huge risk or losses. As it is stated those standard lots consist of 100000 units. Since the Mini lot is only 10% of the standard lot that is 10000 units. So if you open 0.10 lot, that means you are trading One Mini lot.
Of you can also go for a micro lot in forex. Micro lot is basically one per cent of the standard lot that is 1,000 units. Finally, you can also go for the nano lot. Nano lot is also considered as the cent lot. In a Nano lot, the individual either get 100 units or 10 units.
There are several brokers in Forex trading who considers the Nannu lot as 100 units. On the other hand, there are several Forex brokers who consider 1 and a lot equal to the 10 units. Not every Forex broker offers the nano lot.
How does the lot correlate to the profit and loss in the Forex trading market?
Well, the answer is very simple and given in the below-stated section:
Lot Sizes Number Of Units Volume $/pip
Standard 100,000 1.00 $10.00/pip
Mini 10,000 0.10 $1.00/pip
Micro 1,000 0.01 $0.10/pip
Nano 100 0.001 $0.01/pip
Hence these are all the details about the 1 Lot in Forex Trading along with its types.