Pips and Lot Sizes for beginners

[sahara]

Pips are the smallest unit of price movement in forex trading. Most currency pairs are quoted to the fourth decimal place, where one pip represents a 0.0001 change in the exchange rate. Lot sizes determine the volume of a trade, with standard lots being 100,000 units of the base currency. However, there are also mini and micro lot sizes available for smaller trades.

 

[Fin_Trader]

It is better to calculate the lot size based on the size of your deposit in order to control risks in transactions. And the smaller the deposit, the smaller the lot size should be. Also, the lot size is calculated based on the size of your stop loss, where you determine how much you are willing to lose in a transaction if the SL is triggered and calculate the lot based on this.

 

[Fxzombie]

Most traders consider pips to be the smallest unit of price measurement, but actually, pips can still be broken down into pipettes. In forex, Pipette is worth a fraction of 1/100,000. However, this measure is rarely used.