How to make a calculation of the lot?
A professional trader is required to be able to make a calculation of the lot. What does it do? When you open the deposit is removed (until closing) a certain amount, which is determined by the size of the lot and the cost of an asset (currency pair). Experienced trader always uses the rules of money management (see the article "the best money management Forex") and reduces the risk of margin-call.
How to calculate Forex lot on your deposit, we will cover below.
Definition of Forex lot
L. (Engl. Lot) on the Forex-trading volume, which is expressed in a numeric value.
Standard single l. Forex is 100000 base currency. That is, for a transaction to buy or sell currency amount in 100000 in the trading terminal Mt4 we choose l = 1.00, if 0.1-10000 l, 1000-0.01.
Buy 3 lots of EUR/USD, we open a long position with a volume of EUR 300000.
Selling 4 lot GBP/USD, we open a short position of United States $ 400000.
The concept of Forex lot is used exclusively in the Forex market, banks buy and sell foreign currency in any arbitrary amounts.
There are 3 types of l.:
● standard = 1.00 (100000 units of base currency).
● Mini = 0.10 (10000 e.b.v.).
● micro = 0.01 (1000 e.b.v.).
Thus, the trader can sell/buy any amount of currency it needed as 2.00 l and 0.03 l, l can be both a whole number and a fraction.
Keep in mind that Forex Broker provides the trader to trade leverage, which allows a vendor to work with a minimum deposit. Very convenient in this regard cent accounts (we recommend a broker Review ).
All brokers and dealing centers operate on the principle of "picking up" form of any minimal trading volumes of its clients the necessary volume of the larger brokers directly to the stock exchange Forex. All of this is done fully automatically and completely transparent to the traders. But it is thanks to this scheme, you can now trade on the Forex market with a minimal deposit, though with $ 10, with $ 1.
Influence of l. Forex options transactions
Lot size Forex directly affects the pledge of an open position (margin) and the cost of the item. The more HP, the more security, the greater the profit earned on each trader receives a point.
On the other hand, the potential loss. Why professional traders are very responsible choice l.
We recommend you start trading with a minimum lot, provided by your broker on the selected account. As a rule, it is 0.01 for cent accounts the brokers with four-digit prices, and 0.001-with five-digit.
The correct calculation of the lot in Forex
The volume of trading transactions are different for each trader. Sometimes amounts can vary even within the working day (trading) from the same trader. Total amount of the transaction is determined by two factors: the size of the deposit and the selected trading trading strategy.
Almost before the count l. Forex trader must determine the percentage of acceptable risk and the number of points to StopLoss. For example, your trading system has the following options: a deposit of $ 1,000, the risk does not exceed 1% of the amount of the deposit for one transaction, the size of the StopLoss = 50 points.
Then, in a losing trade, we can afford to lose no more than $ 10 (1000 * 1%). 50 points equal $ 1 item = 0,2$. For 0.01 l value of one point would be $ 0,1, then our work will be equal to 0.02 litres. we have identified the value of l for these settings.
You can make it even easier. Many brokers are so-called calculators traders. The broker Foreks4û this http://www.forex4you.org/clients/forex-calc/
расчет лота Форекс
Setting the parameters of the deal, the trader sees clearly the value of collateral, the size of the spread and swap. Very convenient, isn't it? Please note that all true and for cent accounts (put a tick in the box "account currency").
So, we reviewed the concept of Forex lot, what does it do, and how to calculate it. All of the above has a direct impact on the effectiveness of your trade. Wish big profits and good money management!
What is asset management?
What are the options?