fbpx

PU Prime App

Exclusive deals on mobile

  • What is Forex

28 December 2020,06:17

What is Forex

How Much is a Lot

28 December 2020, 06:17

Share on:
FacebookLinkedInTwitterShare

One of the first concepts you need to understand as part of your Forex trading training are standard lots and micro lots; what are they and what’s the difference between them?

What is a Forex lot?

A standard forex lot is equal to 100,000 of the base currency so in the case of EUR/USD is EUR 100,000.  The average pip size for a standard lot which is quoted to 4 decimal places is 10 of the counter currency, so in this case $10.  If you are down 10 pips on a standard EUR/USD contract you have lost $100.

Pip Movements (e.g. EUR/USD @ 1.28205):
5th Decimal Place (Micro pip movement) = 100,000 (1 Lot) x 0.00001 = $1.00 P&L
4th Decimal Place (1 pip movement) = 100,000 (1 Lot) x 0.00010 = $10.00 P&L
3rd Decimal Place (10 pip movement) = 100,000 (1 Lot) x 0.00100 = $100.00 P&L
2nd Decimal Place (100 pip movement (Big Figure)) = 100,000 (1 Lot) x 0.01000 = $1,000.00 P&L
1st Deceimal Place (1,000 pip movement) = 100,000 (1 Lot) x 0.10000 = $10,000.00 P&L

Pip Movements (e.g. USD/JPY @ 76.850):
3rd Decimal Place (Micro pip movement) = 100,000 (1 Lot) x 00.001 = Y100
2nd Decimal Place (1 pip movement) = 100,000 (1 Lot) x 00.010 = Y1,000
1st Decimal Place (10 pip movement) = 100,000 (1 Lot) x 00.100 = Y10,000
Big Figure move = 100,000 (1 Lot) x 01.000 = Y100,000

Let’s take another example in the form of USD/JPY.  The standard lot size is USD 100,000 as USD is the base currency.  As USD/JPY is quoted only to 2 decimal places then a pip is equivalent to JPY 1,000 so if you are up 10 pips on a standard USD/JPY contract you have made JPY 10,000.

Standard lots in forex are usually for institutional sized accounts; we’re talking big rollers, who should have $25,000 or more to make trades using standard lots.

What is a Forex lot?
So let’s get real, if you’re thinking of starting Forex Trading, you have to start small and work your way up. Micro lots are good for beginners who need to get to grips with Forex trading. Unlike standard forex lots, which are worth 100,000 of the base currency, a micro lot is the equivalent to 1,000 worth of the base currency you want to trade. Similarly, unlike standard lots, [where 1pip=10 of the counter currency on pairs quoted to 4 decimal places and 1pip=1,000 of pairs quoted to 2 decimal places] 1 of a pip in a micro lot is only worth 0.10 (4 decimals) or 10 (2 decimals) of the counter currency.

To summarise:

Base Currency Counter Currency Quoted Decimal Places Standard Lot Micro Lot Standard Pip Micro Pip
EUR USD 4 EUR 100,000 EUR 1,000 USD 10 USD 0.1 (10 cents)
USD JPY 2 USD 100,000 USD 1,000 JPY 1,000 JPY 10

Comience a operar con una ventaja

Opere en forex, índices, Rieles y mucho más con los diferenciales más bajos de la industria y ejecución ultrarrápida.

  • Empiece a operar con depósitos desde tan solo 50 $ en nuestras cuentas estándar.
  • Obtenga acceso a atención al cliente 24/7.
  • Acceda a cientos de instrumentos, herramientas educativas gratis y algunas de las mejores promociones del sector.
Únase ahora

Latest Posts

Apertura de cuenta rápida y sencilla

Crear una cuenta en vivo
  • 1

    Registrarse

    Regístrese para obtener una cuenta en vivo de PU Prime con nuestro sencillo proceso.

  • 2

    Fondo

    Deposite fondos en su cuenta sin esfuerzo con una amplia selección de canales y monedas aceptadas.

  • 3

    Empezar a operar

    Acceda a cientos de instrumentos en condiciones de trading líderes en el mercado.

Please note the Website is intended for individuals residing in jurisdictions where accessing the Website is permitted by law.

Please note that PU Prime and its affiliated entities are neither established nor operating in your home jurisdiction.

By clicking the "Acknowledge" button, you confirm that you are entering this website solely based on your initiative and not as a result of any specific marketing outreach. You wish to obtain information from this website which is provided on reverse solicitation in accordance with the laws of your home jurisdiction.

Thank You for Your Acknowledgement!

Ten en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso al sitio web está permitido por la ley.

Ten en cuenta que PU Prime y sus entidades afiliadas no están establecidas ni operan en tu jurisdicción de origen.

Al hacer clic en el botón "Aceptar", confirmas que estás ingresando a este sitio web por tu propia iniciativa y no como resultado de ningún esfuerzo de marketing específico. Deseas obtener información de este sitio web que se proporciona mediante solicitud inversa de acuerdo con las leyes de tu jurisdicción de origen.

Thank You for Your Acknowledgement!