To understand the lot Size in Forex Trading you will need to take the step to the basic terms of the forex trading. Most of the forex broker will offer the one contract size of only 100,000 units of the currency pairs.
In the present scenario, most of the forex brokers will be offered the lower contract sizes with the smaller lot sizes such as the mini lots and the micro-lots that will refer to the contract sizes of the 10,000 and the 1,000 units of the currency respectively.
Types of the Lot Sizes In Forex Trading
As the name recommends, a smaller scale part is proportional to 1/100th of a standard lot for example 1/100 x 100,000 units = 1,000 units of cash or basically, 1,000 units of the base money which is the first money in any currency pair.
For example, if you have a currency pair, for example, the EUR/USD, the base currency is the EUR for example the money you are purchasing. The other cash (the USD for our situation) is the statement money for example the currency you are selling. The cost showed is normally the statement currency. For example, the EUR/USD is cited as 1.1500, to purchase 1 EUR, you have to pay $1.15.
A small scale part is comparable to 1/10 of a standard lot for example 1/10 x 100,000 units = 10,000 units of currency.
When trading one smaller than an expected lot, 1 pip development is proportional to $1 – A little part is just multiple times the size of a miniaturized scale lot.
As referenced over, a standard part is identical to 100,000 units of currency price. When trading one standard part, 1 pip development is proportionate to $10.