Everything has a unit of measurement. For example, a unit of measurement of electricity is a watt, a unit of measure of distance is a meter, and so on. When it comes to the Forex market, the unit of measurement for Forex is the lot.
In this article, we will learn about trading volumes and how they are determined and calculated.
The lot is the lowest unit that can be dealt in the Forex market. If a trader wants to enter into a deal on the currency pair, the euro in dollars and the deal was a purchase, for example, this means that the trader will buy one unit of the euro against the price of the dollar.
If the exchange rate is 1.1130 then the price moves to 1.1131, we find that there is an increase by one point. This is called a gain. But the lot is the value that will be entered into the deal.
So the point that we calculate in the Forex market is the fourth number after the decimal point. If one of them said, you gained 25 points and the price is 1.1130 then the closing of the deal is buy at 1.1155. And so also selling
What this means is that if you entered the deal for a hundred dollars (using leverage 1: 100) each point would be worth one dollar. This means that if you earn a hundred points, your winnings will be one hundred dollars. If the opposite happens and you lose, your loss will be a hundred dollars.
A lot is the value per unit of your capital that you will trade in the market. There are three sizes of lots:
It is generally a hundred thousand of the base currency
It is generally ten thousand of the base currency
It is generally a thousand of the base currency
A lot of 0.01 is usually equal to the value of a 10-cent pip. This is according to what the quoted currency is. For example, the point value in dollars-yen is less than 10 cents. But in cent accounts in Exness of Lot 0.01 equals 1 pip value.
A lot of 0.1 equals the value of a pip of $ 1, except for the cent accounts: the pip value is 10 cents. Thus, the rest of the lot size was measured on that.
Remembering that the point size may vary from one symbol to another, with slight differences depending on the price of the currency pair and market variables.
The first introductory level of the Forex market has ended
Go to the second level
