Forex: "What is the volume of the Transaction"

Most beginners Forex market torment themselves with the question of what should be the volume of the transaction and what it is.

The volume of the transaction in other words is the quantity of goods bought or sold by us. For an illustrative example, let's consider an ordinary situation when you make a deal with a lot volume of 1.0. In the Forex currency market, one lot volume is equal to 100000 units of the commodity, that is, if we conclude a deal on the euro / dollar currency pair with the volume of lot 1.0 at a price of 1.2550, then it is easy to calculate that we buy 100000 units of goods and pay for it 125500 units Currency, that is, in our case, we buy the euro and pay the dollar.

A similar example can be cited with smaller figures, for example, we conclude a deal with a lot volume of 0.01 at a price of 1.2550, this tells us that we are buying 1,000 units of goods and we pay for it 1255 currency units. About what should be the volume of the lot in the transaction to be decided by the trader. Of course, from this follows the fact that the larger the volume of the lot in the concluded transaction, the more we can earn in it on one point. The lot volume directly affects the price of one item and it is calculated very easily, it is enough to divide only the volume of the lot chosen by us by 0.1 and we will receive the price of one item.

For example, the volume of lot 0.1 gives us the price of one item in the amount of 1 currency unit, and the lot volume 1.0 gives the price of the item 10 units of currency. The exception are those quotes that are presented in the form of five numbers after the point, for example 1.25505, in this case to find out the cost of the item you need to divide the lot volume by 0.01.

The cost of one lot - which is actually a measure of volume in the international currency market can vary very much depending on the currency pairs being used, especially the bitter ones in comparison with the classical ones. It is worth considering that when trading the same amount of lots, a broker may require different amounts of collateral, it all depends on the leverage that the trader uses. The larger the volume traded, the more we will earn or lose money with a strong price movement in the market, so it is worth taking into account the additive factor, especially with strong volatility, for example, when important economic news comes out.