#5: What is a Forex Lot Size

What is a Forex lot size?

This is something that might be slightly different from the stock market.

Because when you buy 10,000 shares, 100,000 shares, or 5,000 shares, that is pretty much the numbers that you use.

But when you are dealing with Forex…

There is a little bit of terminology that you might want to familiarize yourself with:

  • Standard Lot (100,000 Units)
  • Mini Lot (10,000 Units)
  • Micro Lot (1,000 Units)
  • Nano Lot (Below 1,000 Units)

For example...

In a standard lot, it represents 100,000 units of currency.

Let's say you want to buy 100,000 units (one lot) of AUD/USD.

The Aussie against the US dollar is currently at $1.20

What happens is that you will receive 100,000 units of Australian Dollar.

In return, you will fork out $120,000 US dollar.

Just to put things in perspective:

  • 100,000 Units = 1.00 Lot
  • 10,000 Units = 0.10 Lot
  • 1,000 Units = 0.01 Lot
  • Below 1,000 Units = 0.001 Lot

With that said, I have come to the end of this video and I'll see you in the next.

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