How to Determine Lot Size in Forex Trading

A lot is basically a unit of measure used to indicate the volume of a position. This is a fixed amount of the base currency prevailing in the forex trading market. Volume in the forex market always uses units of lots, where the size of this lot also affects the level of risk directly. In other words, the greater the volume of 1 lot of forex, the greater the possibility of risk that must be borne.

The size of the lot will determine the size of the transaction that can be carried out in the forex market. If the number of lots is large, then the capital or equity owned must be large and the profit or risk of loss is also large. In general, the brokerage company will provide regular account and mini-account services, and every sale and purchase transaction. The easiest way to calculate lot values ​​is to use a calculator. This calculation is important for optimizing the position volume in relation to the deposit amount taking into account the risks, as well as balancing trades. In addition, proper lot selection and positioning of increased positions will make it possible to choose the trading mode.

The number of lots or called the position size has two sides. A large position size can provide multiple benefits, but it can also cause painful losses. Multiplied profits can come if the position taken is in the direction of the market movement, but losses can occur if the position is taken against the direction of market movement.

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