Trading mechanics
Standard lot
100,000 units of the base currency - the full-size forex contract. On most dollar-quoted pairs it is worth roughly $10 per pip, which makes it the reference every other size is scaled from.
GFN’s figure
On a $10,000 GFN Instant account the 3% daily loss limit is $300 - 30 pips at one standard lot worth $10 per pip, before commission.
In detail
Standard lot,explained
A standard lot is a large position on a small account. Ten pips against you is $100, which is a third of the daily allowance on a $10,000 account with a 3% limit.
Its usefulness is as a mental benchmark: price a trade at one standard lot first, then scale down to the size your stop distance and daily limit actually allow.
Related
Terms thatcome with it
Most rules only make sense next to the ones they interact with. These are the entries this one depends on.
Lot
The unit position size is measured in. One standard forex lot is 100,000 units of the base currency; mini and micro lots are one tenth and one hundredth of that.
Mini lot
10,000 units of the base currency, one tenth of a standard lot. On most dollar-quoted pairs it is worth about $1 per pip, which is the size most small evaluation accounts actually trade.
Micro lot
1,000 units of the base currency, one hundredth of a standard lot. Worth roughly $0.10 per pip on most dollar-quoted pairs, it is the smallest size most accounts can trade.
Pip
The standard unit of price movement in forex - 0.0001 for most pairs, 0.01 for yen pairs. A pipette is one tenth of a pip, which is why most quotes carry a fifth or third decimal place.
Position size
How many lots a trade is placed in. It is calculated from the dollar amount being risked and the stop distance, not chosen first - which is the reverse of how most traders approach it.
Also governed by /rules/margin-and-lot-size
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