Description
Introduction to Trading Units
For any trader, understanding the fundamentals of trading units is crucial. A trading unit is essentially the amount of an asset you trade, and it’s the basis for all transactions in the financial markets.
What Are Lots in Trading?
In trading, a ‘lot’ represents a standardized quantity of a trading unit. For example, in Forex trading, one standard lot is 100,000 units of the base currency. Smaller lot sizes such as mini, micro, and nano lots allow for greater flexibility.
Calculating Profit and Loss
Profit and loss are determined by the difference in the buying and selling prices of the trading units, multiplied by the number of units traded. A thorough understanding of how these factors interact is essential for effective risk management and successful trading.
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