I Want To Know about Lot Sizes In Forex Trading

PLEASE WHAT DOES THE FOLLOWING LOT SIZES MEAN IN FOREX, AM A NEWBIE
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
AND SO ON

Let me help you out in a lame mans illustration.

If you have 100usd to trade, trade with 0.01 lot making sure you don't risk more than 2usd or 3usd per trade which means stop loss at 20 or 30pips so lets say you are able to increase your trading capital to 1000usd, then start trading 0.1 lot making sure you don't risk more 20 or 30usd which means you will always stop your loss at 30pips maximum. If God Helps you and you are able to increase your capital to 10,000 then this is where the real forex trading starts because you can conviniently place 1 lot to trade where you make 10usd profit per 1pip(Every one digit move in a currency value) as against 10cents using .01 lot and 1usd using.1 lot.

So what happens when you now have up to 20,000usd trading capital, then you are made as you can place higher lots and make big money like 100usd per pips movement.

So lot sizes are just a yard stick to determine your level of earning per every trade you execute so it can be a factor in determining how big you earn and how big you lose if the trade goes against you.

I hope this explains your question.

Toks

Can I set stop loss and take profit in INSTANT ORDER?

Yap toks I have added you to my yahoo chat list

Hi everyone,
nice question u asked there. i mean this is a question that if answers well by every forex trader would reduce losses they exprience in forex trading.

what do i mean by this statement? well, it is quite unfortunate that majority of forex traders in nigeria don't care about risk/money management even when they can state it theoritically but during implementation, they end up doing a different thing all together.

for u to be a good forex trader u must know what lots size means, how to use it to ur advantage and all the reply i have seen here really try their best in answering the question. and 'am not here to repeat what they have said but to show u how to manage ur account.

first, u must determine the strategy that u want to use, beleive in it and constantly follow it. 2ndly, u must define ur trading time and time frames that suit ur strategy(example if u are using daily pivot point, u must use it in small time frame and always remember that it is for the whole day. u don't need to calculate it or go to www.actionforex because there is automated one which u can just dump into ur platform folder). as for trading time, the currency pair u trade will help u determine this ie if u choose eur/usd-u should know the time this pair moves rapidly(from my exprience 8am via 10:30am and 2:30pm via 4:30pm). 3rdly, like one of the replies did say from $200 should use 0.05 lots/volume/size(50000lots)-meaning that if u use 30pips stop loss, u will only end up LOSING/gaining $15 which is 7.5% of ur total capital. BUT I PREFER USING NOT MORE THAN 5% OF UR TOTAL CAPITAL which is around 0.04 or 0.03lots. 4thly, whenever u loose, don't trade in revenge because if u do would amount to another loss(very important).

 the essence is for u to grow ur account while learning and even when u loose 3 or 4 times in a row u wont have a margine call(meaning below required margin)

i know some people will be thinking that the profit will be too small but the main thing here is for u to learn while making small small profits.  with this small profit u get ur account to 100% profit, from there u increase ur lots size.

well, i guess i will stop here to continue later.
mekynohenrywhite@yahoo.com for any further question.

henryokoye