What is leverage in forex? when you are trading in the forex market you must know about everything, take your time because we have brought you all a very informative title, we will teach you everything about ” What does lot size mean ” and ” what is leverage and how does it works in the forex online exchange market” and how leverage helps you to earn big amount of money in the market with you less investment, and how many lot sizes are there and which one is beneficial for you to use.
What is Lot size in Forex
Currencies form past have been traded in a specific amount. Which is called lots, the first lot size is the standard size for a lot is 100,000 units. And there are also mini-lot which is 10,000 and micro lot is 1,000
There is the following list of lot sizes that you need to know before trading on the forex online exchange market.
- One STANDARD LOT represents 100,0000 units of currency.
- One MiNI LOT represents 10,000 units of currency.
- One MICRO LOT represents 1000 units of currency.
- One NANO LOT represents 100 units of currency.
As you may know that in the Forex market the exchange rate is measured in pips, Which is the smallest unit of currency.
let’s suppose we are using 100,00 unit which is standard lot size. We will now calculate some examples to understand how it affects the pip value
In case if the U.S dollar is not quoted first so the formula is somehow different
What is Leverage in Forex?
The next thing that comes to our mind is what, do we really need a big amount to money to invest in the forex market. or do really I need to spend $100,000 in my forex trading account to earn 1 standard lot. Then you are lucky because forex is giving you leverage.
When you trade in the Forex market with leverage. You actually are able to control more money than you think. For example, your Forex standard account has the leverage of 100:1 that means that for every $1,000 in your trading account you are actually able to control $100,000 of currency. Don’t you think that is amazing? Here is a chart below that you can clearly understand how the leverage can make easy to trade.
What is leverage in forex? it is very important to understand to become a professional trader. To understand everything about forex trading visit our page Techzeer.com