Forex Lot Size Calculator
Introduction to Forex
What is FOREX?
The foreign exchange market (Forex) is the scenario in which a nation's currency is exchanged for another at a speed of mutual agreement. It was created in the 1970s when the international trade of the transition from fixed to floating exchange rates, and is now considered as the largest financial market in the world for its large turnover.
Introduction to Forex
All currencies are traded in pairs, each one is assigned an abbreviation. Here are some of them (Table 1):
EUR Euro
U.S. Dollar USD
Pound GBP Sterling
JPY Japanese Yen
CHF Swiss Franc
Australian Dollar AUD
CAD Canadian Dollar
NZD New Zealand Dollar
SGD Singapore Dollar
'Base Currency is the first currency in the pair. "Currency Accountant "or" term currency "is the second currency in the pair.
USD / JPY = 120.25
Base Currency Currency Trading
This abbreviation specifies how much to pay in the quote currency to obtain one unit of base currency (in this example, a Japanese yen 120.25 U.S. dollar). The minimum rate fluctuation is called a point or a pip.
The most currencies except USD / JPY, EUR / JPY, CHF / JPY and GBP / JPY in a pip is 0.01, with 4 digits after the period (a pip is 0.0001), and is sometimes abbreviated to two digits. For example, if EURUSD is traded at 1.2389/1.2391 the quote may be abbreviated to 89/91.
The Forex currency pairs are quoted as the Bid and Ask (or offer) prices:
Bid Request
USD / JPY = 120.25 / 120.28
Demand is the rate at which you can sell the base currency, in our case the U.S. dollar, and buying the quote currency, ie the Japanese yen.
Ask (or Offer) is the speed at which you can buy the base currency, in our case the dollar U.S., and sell the quote currency, ie the Japanese yen.
Spread is the difference between purchase price and the price.
Pepita is The smallest price increment a currency can make. Also known as a point. eg 1 pip = 0.0001 for EUR / USD, and 0.01 for USD / JPY.
Exchange rate is the value of one currency expressed in terms of another. The fluctuation in the rate depends on many factors, including the supply and demand in the marketplace and / or operations open market by a government or by a central bank.
1.0 lot size for different currency pairs (Table 2)
1.0 Currency batch size 1 pip
EURUSD € 100,000 0.0001
USD / CHF 0.0001 USD 100 000
EUR / USD 0.0001 EUR 100,000
GBPUSD 0.0001 GBP 100 000
USD / JPY USD 100 000 0.01
AUD / USD 0.0001 $ 100,000
USD / CAD 0.0001 USD 100 000
EURCHF 0.0001 EUR 100,000
0.01 EUR 100,000 EUR / JPY
EURGBP 0.0001 EUR 100,000
100 000 0.01 GBP GBPJPY
GBPCHF 0.0001 GBP 100 000
EURCAD € 100,000 0.0001
NZD / USD 0.0001 NZD 100 000
USDSEK 0.0001 USD 100 000
USDDKK 0.0001 USD 100 000
USDNOK 0.0001 USD 100 000
USDSGD 0.0001 USD 100 000
USDZAR 0.0001 USD 100 000
CHF 100 000 0.01 CHFJPY
Spreads and Margins
Alpari (UK) 's mission is to provide innovative currency trading technology combined with quality execution, competitive spreads and margins.
The margin is the collateral required by Alpari (UK) to open and maintain a position:
*
or
+ An open position for less than $ 3,000,000 (3M) of nominal value leads to a maximum leverage of 1:500.
+ An open position 3M – 5M USD has a leverage of 1:500 for the first 3M and a leverage of 1:200 for the rest of 2M.
+ An open position 5 M – $ 10 million is a leverage of 1:500 for the first 3M a leverage of 1:200 for the next 2M and a leverage of 1:100 for the remaining 5 million.
+ Open positions for over 10 million dollars, the first 3M has a leverage of 1:500, the next 2M has a leverage of 1:200, the next 5 M has a leverage of 1:100. All of the above leads to a leverage of 1:33.
For example, a client opens a position of 12 million dollars (for example, 120 lots on the USD / CHF). His margin requirements shall be:
Nominal value of the open position necessary funds to open a position that provides maximum leverage
First 3 million = 3 million / 500 = $ 6,000 1:500
Near 2 million = 2,000,000 / 200 = 10 000 USD 1:200
Next 5 million = 5 million / 100 = 50 000 USD 1:100
Rest 2 million = 2,000,000 / 33 = $ 60,606 1:33
TOTAL: 12 million dollars = 126 606
Balance is the total financial result of all completed transactions and deposits / withdrawals from the account of exploitation.
Profit / loss is the current gain / loss on open positions calculated at current prices.
Equity is calculated as balance + floating profit – floating loss.
Free margin means funds in the operating account, which can be used to open a position. Margin is calculated as less necessary capital.
Calculation of profits and losses
For example, EUR / USD exchange rate is 1.2505/1.2507 and their leverage is 1:100. You believe that EUR / USD is up and buy 0.1 lot of EUR / USD at 1.2507 (Ask price) – for the contract size see Table 2. As we can see Table 2, 1.0 lot of EUR / USD is 100,000 euros, which means that 0.1 lot (the size of our offer example) is 10,000 euros.
By So buy euros and sell 10 000 10 000 * 1.2507 = $ 12,507. In fact to fund this position is to have $ 12,507 but only $ 125.07. The rest of money (in our example 12381.93 USD) is used to you by Alpari (UK).
The leverage (or gearing) mechanism allows you to open and maintain a position much larger than its operating account value. 1:100 leverage means that when you want to open a new position, needs the support of a deposit 100 times less than the value of the contract that are interested
For example, you believe that EUR / USD is moving more and buy 10,000 EUR and sell $ 12,507. Assuming you are right and EUR / USD rises to 1.2599/1.2601 and you decide to close the position: when you close a long position to sell the base currency (EUR 10,000 in our example) and buying the quote currency (10,000 * 1.2599 = $ 12,599)
EUR USD Transaction
Open positions: buying and selling EUR + USD 10000-12507
Close a position: sell euros and buy dollars – 10 000 + 12 599
Total: 0 + 92
NB: When you close a short position to buy the base currency and sell the quote currency.
Features of this position needs only 100 euros (approximately 125 USD) No $ 10,000. The benefit of this position is 92 pips (1.2599-1.2507 = 0.0092). A pip is a minimum rate fluctuation. For EUR / USD is 0.0001 1 pip price (see Table 2).
This example shows a favorable outcome. If EUR / USD has fallen you would realize a loss and not a profit. This loss is magnified as a result of leverage. For example, if you close the position at 1.2419, your loss would be $ 88. If you have questions about their understanding of the risks, please consult a qualified financial advisor.
Lot size is the number of the base currency, underlying asset or shares in one lot defined in the contract specifications. For details, see Table 2.
Lot is an abstract notion of the amount of base currency, stocks or other underlying assets on the trading platform.
Transaction (or deal) size is the lot size multiplied by the number batch.
Long position is a buy position whereby you profit from an increase in the price. With regard to currency pairs: buying currency base against the quote currency.
Position is a short sell position whereby you profit from a decline in the price. For currency pairs: sell the base currency against the quote currency.
Completed transaction consists of two counter deals of the same size (open and close a position): buy then sell or vice versa.
Leverage is the term used to describe margin requirements: the relationship between the guarantee and the value the contract. 1:100 leverage means that you can control $ 100,000 with only $ 1,000 (1%).
Rollover / Interest Policy
currency trading Alpari (UK) is a "Spot" only basis. This means that all trades settle two business days after conception, according to market convention. The settlement date is known as the value date. Alpari (UK) does not arrange physical delivery of currencies Therefore, all open positions on the left 10:59:45 pm to 10:59:59 pm (London time) will be transferred to a new value date.
As a result, positions are subject to a charge exchange or credit based on the "Rollover / Interest Policy" webpage.
Note note that from June 3, 2007 Alpari (UK) Limited no longer closes and reopens the positions are open at 11:00 pm London time. Instead we have introduced a most convenient method of rollover which involves debiting or crediting a customer's trading account when he / she has open positions overnight.
The cost of refinancing is based on the interest rate differential of the two currencies. Let us assume that interest rates in the EU and the U.S. are 4.25% per annum and a 3.5% per annum respectively. Each transaction involves borrowing one currency to buy another currency. If you have a buy position of 1.0 lot in EUR / USD, then you earn 4.25% in euros and dollars loan at 3.5% per year.
In other words:
* If you have a position long (ie, purchased) and the first currency in the currency pair has a greater interest rate to a day of the second currency, then you receive a profit.
* If you have a short position (ie sold) and the first currency in the currency pair has a greater interest rate to a day of the second currency, then you lose difference.
* If you have a long position (ie bought) and the first currency in the currency pair has a lower interest rate for the night the second currency, then you lose the difference.
* If you have a short position (ie sold) and the first currency in the currency pair has a lower interest rate during the night than the second currency, then you receive a profit.
Please note that if you open and close a position before 10:59:45 pm (London time) will not be subject to a rollover.
The act of rolling the money over of torque is known as tom.next, which means tomorrow and the next day.
NB: When you take an open position from Wednesday to Thursday after next Monday week becomes the value date, not Saturday, so that the transfer of load on a Wednesday night will be three times the value indicated in the "Rollover / Interest Policy "webpage.
Why trade Forex?
Unlike other financial markets Forex has no physical location, such as stock exchanges, for example. It operates through the electronic network of banks, computer terminals or via telephone. The lack of physical exchange enables to operate on 24 hours a day, ranging from one zone to another across the major financial centers (Sydney, Tokyo, Hong Kong, Frankfurt, London, New York, etc). In all financial centers there are many distributors, who purchase and sell currencies 24 hours a day during the week of working together. Trade begins in the Far East, New Zealand (Wellington), then Sydney, Tokyo, Hong Kong, Singapore, Moscow, Frankfurt-on-Maine, London and ends in New York and Los Angeles. Here are approximate trading hours for regional markets (London time):
Japan 00:00-06:30
6:30 to 13:00 Continental Europe
8:30 to 15:30 Great Britain
U.S. 14:30 to 21:30
Forex Offers some advantages making it very popular among investors:
* Liquidity. Forex is the largest financial market in the world with the equivalent of over U.S. $ 3-4 billion changing hands daily, while the volume traded in the stock market is only about 500 billion U.S. dollars.
* Flexibility. Forex Market is open 24 hours, which offers a great advantage over other markets, for example, stock exchanges, which are only open during regional business hours. You can respond to breaking news immediately if the situation demands and customize your business hours.
* Low transaction the costs. Traditionally there are no commissions or fees in the currency, with the exception of the spread.
* Margin. We leverage 1:100 (deposit only less than $ 100,000) is a powerful tool. You need to support a deposit of U.S. $ 1,000 to make a deal with $ 100,000. high leverage combined with a rapid rate fluctuations can make this profitable market, but at the same time risk: Please see Risk Warning below.
Risk Warning
Under margin trading conditions even small market movements can have a major impact on the customer's business account. Be aware that if the market moves against you, you may suffer a total loss of more of the funds deposited. You are responsible for all risks, resources used financial and business strategy chosen.
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