Company News Markets News Cryptocurrency News Personal Finance News Economic News Government News. Your Money. Personal Finance. Your Practice. Popular Courses. What Is a Mini Lot? Compare Accounts. Advertiser Disclosure ×. The offers that appear in this table are from partnerships from which Investopedia receives compensation.

This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Terms. Forex Mini Account Definition A forex mini account allows traders to participate in currency trades at low capital outlays by offering smaller lot sizes and pip than regular accounts. Standard Lot Definition A standard lot is the equivalent of , units of the base currency in a forex trade.

It is one of the three lot sizes; the other two are mini-lot and micro-lot. Pip Definition, Calculation, and Examples A pip is the smallest price increment fraction tabulated by currency markets to establish the price of a currency pair. Micro Account Definition A micro account caters primarily to the retail investor who seeks exposure to foreign exchange trading but doesn't want to risk a lot of money. Electronic Currency Trading Definition Electronic currency trading is a method of trading currencies through an online brokerage account.

This screenshot displays an order being opened in the trading terminal. The account specification determines the step size. For example, the minimum step size on the Classic account is 0. The trader can manually enter the position volume accurate to the hundredth of a lot, for example, 0. Important: Despite the standard terms, some brokers can use them differently. For example, one of the brokers has one lot equal to 10, base currency units. Perhaps this is intended to reduce the minimum amount of deposit without leverage.

In any case, before you start to trade, carefully read the offer, account details, and contracts specification. When you open a 1-lot trade on a mini lot forex account, you buy or sell 10, units of the base currency instead of , as with a standard lot. The mini-lot is convenient as it requires less money to enter a trade, and so you need a smaller deposit. The trading asset is the EURUSD pair; the exchange rate is 1.

One standard lot is , of base currency. If you want to enter a trade of one lot, you should spend , USD to buy , euros. If you are an individual trader, you are unlikely to have such capital at your free disposal.

The minimum lot size forex under trading conditions is 0. This means you need 1, When you enter a EURUSD trade of 1 lot, you buy euros for 1 A trade of 0. A nano lot is 0. Nano-lot accounts are called cent accounts. One lot here corresponds to a trade for units of the base currency. The smallest possible transaction with a volume of 0.

Regular accounts do not allow to make transactions for such small volumes. However, cent accounts have a drawback. Not only the transaction volume, i. So, professional traders, who want to recoup the time spent and make real profit, do not use cent accounts. A standard lot size is the maximum possible contract size provided by the broker's trading conditions. Do not confuse the maximum lot with the standard one:.

You can find the information about the lot type used on a trading account in the MT4 contract specialization. In the Market Watch tab, right-click on the asset currency pair and select the Specification tab. It is clear from the specification that the contract size is ,, so the lot is standard.

The specification also reads that you can enter a trade of a minimum volume of 0. In MT4, the trade volume can be selected in the window of the position opening:. The minimum transaction volume for the GBPUSD pair is 0. The volume is not limited to 8 lots, as in the screenshot - you can enter any number up to 10, in 0.

For example, To compare, I will open in the LiteFinance terminal two demo accounts with a deposit of 2, USD each, with a 1: leverage. I will open positions with a volume of 1 and 0. There will not be enough money to open a second order with the same amount of money. Of the USD, only I can use the remaining cash balance of If you reduce the lot size, you can open positions, but the financial result also decreases.

For example, in this case, the floating loss is less, it is If you are sure in your trading decision to buy or sell, you can open a trade with a higher volume to increase the profit. Aggressive strategies with a high risk level suggest entering trades with the maximum possible lot to increase the deposit.

Conservative strategies suggest minimization of loss rather than chasing after the high profit, so they imply entering trades with a small volume. For whatever asset you enter a trade, it will in any case be made in the account currency.

In most cases, it is the USD. Therefore, it is crucial for traders to understand how much money they will actually have reserved in USD when opening a position, for example, for a cross rate.

The easiest way to use the trader calculator or forex lot calculator to find out the lot size in Forex:. Remember, the leverage size does not affect the risk if there is a clearly defined target for the position volume. With the same lot size, the change in leverage affects only the amount of the collateral. You should also note whether a direct or an indirect quote when calculating the pip value. For example, the pip price in the EURUSD pair is 10 USD in the Forex standard lot.

In the USDJPY pair, the pip price will already be 9 USD. Next, I will explain examples and formulas for calculating a lot size in USD for different types of assets.

Depending on what a trading unit is lot, mini lot, or micro lot , and also depending on what is meant by it, the price of a pip is determined. The pip value is the profit or loss that a trader receives in the currency of the deposit when the price passes 1 pip point in one direction or another.

The pip value is also very easy to recalculate using the trader calculator mentioned above. If you enter a trade of 0. Differently put, the gain of one pip in a trade of 0. But we are going to stick to the risk management rules. Hence the maximum permissible lot is 0. The minimum lot size is 0. Since for 0. Thus, the lot volume depends on the drawdown the trader allows in the calculations. Here, the simple model in Excel will show the dependence of the lot on the drawdown or stop loss.

We divide the position by the current rate say, 1. It does not take the drawdown into account. The greater the volume of the lot, the higher the pip value, and the faster the deposit will disappear in case of price reversal. You can find out the maximum lot size in the contract specification in, for example, in MT4.

This is the screenshot of the contract specialization of the EURUSD currency pair. The contract size is , It means that the standard lot is used on the account. The minimum possible trade is 0. The maximum lot is 10, This is the contract specification on the UKBrent, oil contracts. One standard lot is 10 barrels, one barrel costs The minimum lot is 0. The maximum lot is 5. These calculations do not take into account the use of leverage and the specified margin percentage.

Leverage reduces the required investment amount. Input parameters for building a trading model that affect the level of risk are the following: Transaction volume in lots and lot type, leverage, pip value, volatility, spread level, risk per transaction, the total risk level of all open transactions in relation to the deposit, deposit amount, target profits. I suggest that you use the following formula for calculating the lot concerning the risk level:.

A is a coefficient equal to 1 for a long position and -1 for a short position. Price 1 and Price 2 - the opening price and the stop loss level. The stop loss level in this case is one of the options for averaged or maximum volatility, which I also mentioned above.

The standard lot size in currency pairs is a constant value, , basic units. However, the amount of money locked by the broker as a margin to maintain trading positions is different; it depends on the asset value and the size of the opened position.

You can enter two trades of 1 lot each; the different sums will be blocked. The higher is the asset price, the more significant sum will be taken as a margin, and the higher will be the risk for a trade. Equity in the Forex market is free funds on a trader's account available for trading. The amount of free funds changes during the trading process due to the margin used to maintain opened positions and the amount of floating profit or loss. Remember, the pip value for the EURUSD pair is calculated according to the formula: 0.

The increase in the pip value means an increase in potential profit or loss. With a minimum lot size, the equity changes slowly, gradually. If you increase the position volume, the rise, or the plummet in the equity becomes sharper and faster. The margin is a little more than USD. There is a small profit of 1. Next, I open the second position of 1 lot. The Margin assets used sharply increases; the Margin Level decreases.

All trades could be stopped out as a result of such an unwise strategy. The loss of a few dozens of cents turns into a few dozens of dollars. I exit the trade. In MT4, I open the Account History tab and right-click on it. I select the option Save as a detailed account.

This is the Balance change. After entering the first trade of 0. It is the short section of the blue line in the chart, which is directed upward.

Next, there has been an opposite position of 1. The instant loss is shown by a sharp drop in equity. When you open a new order in MT4, the default lot size is 1. When it is about split seconds, it is impossible to change the trade volume constantly.

If you always enter trades with the same volume, you can set the position volume as follows: Tools — Trade - Size by default. In the Expert Advisers, the initial lot size is set in the Lots parameter. You can also use the system of automated lot calculation by enabling the UseMoneyManagement parameter.

You should specify the risk level and the maximum lot size. A lot in any market is a contract. The only difference is in the measurements and quantity of the asset included in 1 lot. For currency pairs, the lot is the number of base currency units, for gold - a troy ounce, for oil — barrels.

For stock indices, one lot is the price of one share. Step 1. Open specification to see the contract size for the instrument. You can do it in the following ways:. Step 2. We calculate the amount required to enter a trade of 1 standard lot.

So, you will need USD to open a position of 1 lot. If you open a position of 1 lot in the LiteFinance terminal, you will need 41 USD instead of USD, i. It is different for different assets. In other words, when trading using leverage, there is a position opened with a leverage, which is ten times less than the lot size. Important moment: no matter what leverage you set for the account 1: 1 or 1: , the position on CFDs on oil, metals,, and stocks will be opened with the leverage written in the specification in the Margin Percentage line.

You can read more about margin percentage and forex trading using leverage in the article What is Leverage in Trading: Ultimate Guide for Beginners. One standard lot XAU is calculated in the same way as one lot of oil. The specification states that the size of the contract is troy ounces. Again, we look at the Margin Percentage in the specification. This means you can open a position of 1 standard lot ounces at the price of 1 ounce.

The margin percentage allows you to open a position of a higher volume than your deposit can afford, but the point price is higher. Brokers have different approaches to determining the contract size for the stock CFD. On the LiteFinance trading platform, the size of one full standard lot for all indices corresponds to one contract. But when you calculate the value of a lot, you need to consider the margin percentage and the currency of the contract, the size and value of the tick.

The specification on the LiteFinance website reads that the contract currency is GBP; the current GBPUSD rate is 1. The cost of 1 full standard lot will be: 1. This will be the amount of the collateral that the broker will block.

Here you can find the Forex brokers that offer micro-lot accounts to their traders. One micro-lot is a hundredth of a standard lot, or 1, units of a currency. Despite its reputation, a micro-Forex account can be very useful even if you have enough trading capital for a standard account.

It is much easier to implement conservative position sizing techniques with micro-lots. Some trading strategies require simultaneous creation of tens of market positions; in this case micro-lots will surely help to size and scale the positions adequately. You will find brokers listed in the table below. MT4 Forex Brokers MT5 Forex Brokers PayPal Brokers WebMoney Brokers Oil Trading Brokers Gold Trading Brokers Muslim-Friendly Brokers Web Browser Platform Brokers with CFD Trading ECN Brokers Skrill Brokers Neteller Brokers Bitcoin FX Brokers Cryptocurrency Forex Brokers PAMM Forex Brokers Brokers for US Traders Scalping Forex Brokers Low Spread Brokers Zero Spread Brokers Low Deposit Forex Brokers Micro Forex Brokers With Cent Accounts High Leverage Forex Brokers cTrader Forex Brokers NinjaTrader Forex Brokers UK Forex Brokers ASIC Regulated Forex Brokers Swiss Forex Brokers Canadian Forex Brokers Spread Betting Brokers New Forex Brokers Search Brokers Interviews with Brokers Forex Broker Reviews.

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Here, you will find two valid reasons to trade with a broker offering micro- or nano-accounts: Your account is not big enough to tolerate bigger lot size.

Your deposit is big enough, but you want more precision in your position sizing. Platforms MetaTrader 4 MetaTrader 5 Capitalcore WebTrader Countries Regulation.

Platforms MetaTrader 4 WebTrader Countries Regulation. AAFX Trading. Platforms MetaTrader 4 MetaTrader 5 Web Trading WebTrader MetaTrader 4 Web VPS Countries Regulation FSA St. IQ Option. LiteFinance ex-LiteForex. Evolve Markets. City Index. CMC Markets. iFOREX Vestle. TradeView Forex. One Financial Markets. Ingot Brokers. Velocity Trade. Windsor Brokers. CPT Markets. Renesource Capital. ICM Brokers. com ex-MARKETSX. Synergy Markets.

Trader's Way. IC Markets. Grand Capital. ICM Capital. IFC Markets. Blackwell Global. GBE brokers. Forex Optimum. Euro Pacific Bank. Traders Trust. XGLOBAL Markets. Hirose Financial UK. TMS Brokers. Invast Financial Services. Hantec Markets. Cornèr Trader. OvalX ex-ETX Capital. FX Choice.

Key To Markets. ADS Prime. Capital Index. Core Spreads. Titan FX. CM Trading. FCI Markets. OffersFX ex-Xtrade. FX Giants. Milton Markets. JFD Brokers ex-JFD Bank. FP Markets. Turnkey Forex. Ally Invest. Global Prime. Swiss Markets. World Forex. Global Market Index. EBH Forex. Fullerton Markets. Big Boss. Capital Street FX.

ETO Markets. Equiti ex-Equiti Global Markets. Alfa Capital Markets ex-Alfa Capital. Axiance ex-EverFX. Vantage ex-Vantage FX. One Global Market. ACY Securities. Blueberry Markets. Credit Financier Invest. Olymp Trade. Purple Trading. AMP Global. CMS Prime. Scandinavian Capital Markets. Juno Markets. Anzo Capital. BlackBull Markets.

CM Trading. Investopedia is part of the Dotdash Meredith publishing family. Therefore, the permissible transaction volume is 1 standard lot in indices, lot splitting is not allowed UKBrent. The margin is a little more than USD. Risk management rules and the allowable level of risk.

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