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Forex Lot

Before trying to trade on a real live account, you must understand what FOREX lot means and how it affects your trading. Lot in FOREX is the amount of cash you put into a single transaction. Since the actual amount of money you control also depends on leverage, your risk can be more than you think.

1 lot in FOREX equals $1,000 USD, while 1 mini-lot equals $100 USD. If your account has 100:1 leverage, 1 FOREX lot will let you control $100,000 USD, (10,000 USD for 1 mini-lot). However if leverage level for your account is set to 200:1, you will control $200,000 USD or $20,000 USD respectively.

If you do not consider leveraging while choosing number of FOREX lots for a particular transaction, you may either play too risky or miss a significant chunk of profit. I’ve seen the following leverage levels on various FOREX brokers: 20:1, 50:1, 100:1 and 200:1.

Before making a trade, always calculate the total amount of money you control based on lot size and leverage. This will give you a clear picture of what you are going to risk, and how great your profit will be.

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  1. ramon
    7 years ago

    how can we calculate the total amount of money you control based on lot size and leverage

    • grvitaly
      7 years ago

      I am not really sure about the question.
      Total amount of money you control is whatever is in your account.

      When you open a position with leveraged brokers, you simply multiply number of lots by the size of the lot.
      Size of the lot depends on your account. There are micro accounts, mini accounts, regular lots and different leverages.
      1:20, 1:50, 1:100 and even 1:200