Selecting a Lot size for working will have a huge impact on the risk management scheme. You might ask yourself, “Which lot size is perfect for me?” Reply to this questiondepends on the style of trading but a general rule is smaller is always better. The smaller is the size of your lot; you will be more flexible as far as managing the trades are concerned.
Utilizing Micro Lots
These lotsare the least tradable found with most of the traders. Micro lot isdefined as a lot of thousand units of the accounting currency. If the account is subsidizedin US dollars, the micro lot will be about $1000. If you are dealing with a pair based on dollar, one pip will be equal to ten cents. These lots are perfect for beginners.
Utilizing Mini Lots
Prior to the micro lots, you will also come across mini lots. Mini lot can be described as ten thousand units of the accountmoney. If a person deals with an account based on dealing a pair based on dollar, every pip in this trade will be worth one dollar. If one is a fresher and want to learn trading by utilizing mini lots, make sure that you have enough capital with you. It totally depends on you to decide the risk tolerance.
Utilizing Standard Lots
Standard lot is defined as a hundred dollar unit lot. If you are dealing with dollars it comes to 100,000 dollars. This is considered as hundred dollar loss when one isdown by ten pips. The standard lots are meant for the sized accounts. This signifies that you should have nearly twenty five thousand dollar or more than that for making dealswith basic lots. Most of the traders trade in mini lots and micro lots. This might not look glamorous, but make sure that you keep your lot size within a reason for the size of the accountwhich will help one survive for a long time period.