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A mini lot is a term that is used for a 10,000 unit trade, where with the most major pair’s means that you are trading $1 a pip. By trading with mini lots you are able to pack a punch which is around ten times larger than micro lots, meaning that the mini lots should be properly capitalised before they are traded. It is recommended that around $1000 deposited into your account for each individual mini lot that you plan to have open all at the same time. Mini lots are good trade size for those that are only part time forex traders with the capital of can also be useful for full time traders too, who looking for smaller sized lots.
A currency trading size of 1/10 is around the normal standard size lot of 100,000 units. One pip of a currency pair is equal to one American dollar when trading a mini lot, compared to a standard lot which is worth $10. Mini lots are can be traded if you have opened a mini account with a forex dealer. Mini accounts do not only have to be limited to trading one mini lot at any time. When comparing mini lots with standard lots, mini lots allow traders to customise their own trades and have a greater control over the risk exposure.
In forex trading, a mini lot is worth around tenth of a ‘lot’, which is the standard unit to measure the amount of money. An example of this is if you were to trade a single mini lot with the currency pair EUR/USD, you would typically trade euros in the value of 10,000 US dollars.
Mini lots are useful investments as they serve many practical purposes. You also find experienced traders using mini lots to tune their exposure to a particular market. With algorithmic trading increasing, trade sizes are not so much done in full blocks due to the risk exposure from 500,000 to 600,000 is considered rather large when you are able to move from 500,000 to 510,000.
Many traders also use mini lots to learn and limit any possible risks. They help traders to feel comfortable and safe when dealing with equity within their accounts fluctuating due to the market movements. Mini lots are also able to reduce risks and test markets. By tightening trade sizes that are based on quantitative models that some traders have developed you are able t limit any risks that could occur. It is not required for you to have a quantitative model to trade on the foreign exchange market, but it is becoming a more common method. When testing the market mini lots allow you to split your trade of any size, large or small, and only open it up to the market in the given chunks. By doings this your able to see if you trade is either working in your favour or not.
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