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Forex Lots

A Forex Lot is the amount of currency you buy or sell. Say for example you wish to buy 100,000 USD, 100,000 is basically your trade size.

Forex Lot is basically representation of Trade Size in a different format. A Standard Lot would represent 100,000 of any currency, whereas a Mini Lot represents 10,000 and a Micro Lot represents 1,000.

So essentially 10 Mini Lots make 1 Standard Lot and 10 Micro Lots make 1 Mini Lot.

100,000 of a currency represents one Standard Lot or ten Mini Lots or one hundred Micro Lots in Forex market.

100 Micro Lot = 10 Mini Lot = 1 Standard Lot

When you place orders online you should know what account you have and how your broker lets you trade. For example with MBT, you can have an Standard Forex Account and still place trades in Mini Lots. On the other hand with Dukascopy you can only trade Standard Lots.

You may also want to read about Different Type of Forex Accounts.

Forex Margin Call

Forex Margin Call, the term Margin Call comes from Stock Market. It is essentially a phone call from the Stock broker asking you to put more funds in your account to sustain the losses from open positions. At this stage trader is required to put more money in the account usually with in 24hrs or else the position would be closed at a loss. This loss can very well exceed the total account balance and you may still need to pay Stock broker for the remaining losses. The situation is worsen when you use leverage to borrow money from the bank or stock broker.

The only good thing about Forex Margin Call is that you won’t lose more money than your total account balance. Most brokers would close out all your positions before you run out of balance in your account. However in some cases where price gaped after the weekend may result in loss beyond your account total balance. I would recommend to check with your broker to find out about their policies regarding Forex Margin Call.

You may also want to read about Forex Leverage.