Forex trading is currency trading, and there are specific amounts traded in currencies called a lot. A “Lot” is used as the measuring unit for transactions and different short, long amounts of currency transactions. There are different sizes of a lot divided into separate categories mini, micro, Nano. In other words, it’s about starting 100, to 1000 or the highest limit of standard a Lot is 100,000. As you see in the forex market, the value of the currency changes with time and the number of pips increases or decreases with time.
Types Of Lots
Four types are considered in Lots which are different by name and size. All are as follows in little detail.
Nano
Nano is the smallest Lot in the forex and o.1% of the standard Lot of 1000 units in the base currency.
Micro
Micro is level up from the nano and 1% of the standard of 1000 units. All the types, including micro, are considered in base currency.
Mini
Mini Lot is 10% of the standard 10000 units. Micro is considered the second-highest level of the types of lots.
Standard lots
Standard is supreme and above all the levels 100,000 units of the base currency.
What is pip and value per pip?
Percentage in point represents a change in value between two currencies. The value in pip is different from each other in yen pair value per pip 0.01 and some other currencies it will 0.0001 which is considered a big difference. In other words, understanding the lot size is also important, and after that, the value per pip is decided.
What is leverage?
Every small investor is thinking about how to trade a lot of money to generate revenue. All these peoples have how to buy 150 thousand dollar currency pairs in their minds. It will help to find how to find forex leverage for beginners and all the following criteria of currency buying or selling. The leverage is based on your choice and depends on your broker with more comfortability. Margin is different from that, depending on how much your broker charges as a deposit.
How can I calculate profit and loss?
Calculating the profit and loss is a very easy and not to much complex task to perform. Manual calculations are very hard to perform, and in today’s time, nobody will do calculations manually. In other words, you can use a position calculator to perform all your calculations online. So start using calculator for calculations.
Conclusion
Getting knowledge about different lot sizes will help you in calculating pip values. All these things help you in the management of the risk. In other words, by calculating all the values per pip. As you know, many different pairs of currencies change with time. In other words, calculations are also important, and without calculating the Lot, you cannot consider all the pairs of currencies. After reading this guide, you can understand the Lot and all the types of Lot.