What is a lot in forex? How to calculate the lot size?

What is a lot in forex trading?

A batch in forex trading means a unit of value that measures the size of a transaction. So depending on the number of lots you trade, the amount you invest will be more or less important.

The change in the value of one currency against another is measured in pips, which are the fourth decimal place and therefore very small measurements. This means that trading a single unit is not viable, so there are lots to allow people to trade these small moves in large lots.

The value of a lot is set by an exchange or similar market regulator, which ensures that everyone is trading a set amount and knows how much of an asset they are trading when opening a position.

So how much is a lot worth in forex? It depends on whether you are trading a standard lot, mini lot, micro lot or nano lot. Forex transactions are divided into these four standardized units of measurement to help account for small changes in the value of a currency.

Learn more about forex trading with IG

Leave a Comment