How To Calculate Lot Size in Forex Trading?

lot size in forex trading

In general, a 0.01 lot size is called a “Micro Lot” in forex trading, which is equivalent to the 1,000 units of any given currency. The pip value for each micro Lot in any forex pair, where the USD is the quoted currency, e.g. EUR/USD, is $0.1. Suppose you trade a micro lot of EUR/USD and the price of 60 pips moves in your favor, then the profit will be calculated as $0.1* 60 pips which equals $6. 

If you are able to understand the concept of lot size effectively, you are able to execute trades more efficiently because you can determine your costs and risk-rewards ratios, making things transparent for you. For Example: When a currency pair only moves one pip per week, and the pip value of each lot size is $6, and your broker charges six pips as a spread, there is no way to earn profits. So, what should you do in this situation? Well, here are the tips that can help you learn how to improve forex trading. Read More