Skip to content Skip to sidebar Skip to footer

Definition of Lot in Forex Trading

The world of trading is now increasingly in demand, even in Indonesia alone, many new traders have emerged. Not surprisingly, its ease in investing and can be done anywhere and anytime which makes it even more interesting to try,. But for those of you who are new to trying Forex trading, you can't directly play trading without learning the things that are inside. One of the most important rules is to know the words that are involved in Forex trading. One of them is ереrtі еrtіаn lоt, аа is lоt? And the effect on trading? This time it will be explained further.

Definition of Lot in Forex Trading

Aа that lot? It may be the most frequently asked thing for beginning traders. The lot is a unit of measure in the trading transactions you make. Some traders refer to lot as Quantity. And for beginning traders, this definition is a lot to be learned because it will really help traders in doing trades.

The lot size will determine the large size of the transactions carried out in the Forex market. If the trader's owned capital is large enough, then the trader can carry out Forex trading transactions using a large number of lots. However, you need to remember, in every investment there is a risk, where a large profit opportunity will also spread the risk received. So by trading using big lots you have a risk of defeat or even higher odds even though it is followed by high chances of getting profit.

As explained, the lot is the standard size of the unit in every Forex trading transaction. Generally 100,000 units is the standard currency used for standard accounts, 10,000 units for small accounts, while 1000 units are micro accounts.

But in the past, before the Internet was growing rapidly this time. Forex trading can only be done for a small number of people. This is because trading requires large enough capital. It takes 100,000 units of currency or using a standard account to trade. And of course, this cannot be done by everyone, especially if you have limited funds.

Due to the increasingly advanced technological sophistication, now the practice of using limited funds can be very helpful. How's the advice? That is by using a smaller unit lot, which is 10,000 units for this mrо lot account, 1000 units for a mісrо lоt account, and 100 units for a nаnо lоt account. And in Indonesia itself, it is very rare for Forex brokers to offer nоt nаnо.

Why Lot Quantity Must Be Concerned?

Hearing the previous explanation, the lot size is of course very important and must be considered for people who are in the world of Forex trading. And the ground rules when you want to study this lot are:

Lot is the smallest unit that can be used in Forex trading. This means that if you want to use a larger lot size, you will need a larger margin

Total lot
The number of lots transferred will greatly affect the profits and losses obtained from trading transactions. The larger number of lots of course makes traders able to earn bigger profits. But still, you have to pay attention to how the automatic loss risk is also getting bigger