LESSON NO 19
What are Lot in
Forex: Lot
express the value in forex. There are
three types of lots:
Ø Micro Lot : It means that one pip is equal to 10
cents, in trading you will gain profit or met loss 10 cents per pip.
Ø Mini Lot : In mini lot one pip is equal to 1
dollar which means that during the course of trading you will earn or loose one
dollar for every pip.
Ø Standard Lot : In
Standard Lot one pip is equal to 10 dollars so if you have earned one pip you
have earned 10 dollars and if you have lost one pip you have met a loss of 10
dollars.
What are Types of
Order in Forex: In
forex trading there are mainly two types of orders:
Ø Instant Execution / Market Order : Trading on Current Market rates is
called market order. If you are buying
or selling any pair on the rates shown on your platform it is called market
order
Ø Pending Order : There are two sub categories of
Pending Orders:
Ø Stop Orders : In Stop orders you buy on higher
rates than current market rats of sell on lower rates than current market
rates. For example if current price of
EUR/USD is 1.3060 and you want that if it reaches at 1.3040 and you sell then
you have two options either stick in front of your computer / laptop and stick
to screen to watch the price variations carefully or place a stop order and
when price will reach at 1.3040 your order will be executed and your trade will
automatically be opened.
Ø Limit Orders : In limit orders we buy below current
market rate or sell above current market rates.
For example if current price of EUR/USD is 1.3060 and you want to buy at
the price of 1.3030 then you will place a pending Limit order and as the price
will hit 1.3030 you buying trade will be automatically executed and opened.
