How to calculate the lot size in USD?

[Shing1985]

How to calculate the lot size in USD?

 

[sunar14]

You calculate pip value for your pair, like 10 AUD, and then multiply it AUDUSD exchange rate.

 

[Freshmoneyfr]

Some brokers have pip value calculator. Or you can just google it and use one.

 

[JonDir]

Yes, this is not a problem now. Many companies provide such a calculator. You can search on Google. I think this information can be easily found.

 

[Electric Rainbow]

Yes and there are traditional ways also to calculate the lot size, all you need to do is to search on google about how to do it.

 

[sunar14]

Use pip value as starting point for calculations since the smallest price movement is pip hence you just multiply expected move by pip value and then calculate the lot size.

 

[Electric Rainbow]

Basically, traders calculate pip value by dividing one pip (usually 0.0001) by the current market value of the forex pair. Then, multiply that figure by your lot size, which is the number of base units that you are trading.

 

[sunar14]

Basically, traders calculate pip value by dividing one pip (usually 0.0001) by the current market value of the forex pair. Then, multiply that figure by your lot size, which is the number of base units that you are trading.

If the smallest price move a pair is pip, i.e. 0.0001 you have multiply your lot size by 0.0001 to get pip value in base currency. Then you can convert it to USD multiplying by .../USD rate.

 

[Electric Rainbow]

For Instance, if we talk about USD/CAD appreciated to 1.0568. In this case, 1 pip is a 0.0001 change, so the trader makes a profit of 20 pips (1.0568 – 1.0548 = 0.0020, which equals 20 pips). To calculate the profit or loss of a trade, we multiply the number of points earned by the value of each point.

 

[sunar14]

Yeah and here is where pip value comes handy, though do not forget to convert it to the currency of your account to estimate risk and profit correctly.

For Instance, if we talk about USD/CAD appreciated to 1.0568. In this case, 1 pip is a 0.0001 change, so the trader makes a profit of 20 pips (1.0568 – 1.0548 = 0.0020, which equals 20 pips). To calculate the profit or loss of a trade, we multiply the number of points earned by the value of each point.