Lot size risk management question

[goldencookie]

I consult the position size calculator: babypips forex-calculators positionsize
It tells me:

Standard Lots 0
Mini Lots 1
Micro Lots 14

So now I realize I have no clue! Isn’t a micro lot 0.01 ?
If that is so then isn’t 14 Micro Lots = 0.14 ?
If that is so then what is 1 Mini Lot and 14 Micro Lots?
Is it 0.24 ? Would that be the position size (add 0.14 to 0.10)
or is it something else?

Thank you in advance, this question should reveal that I am The Newbie!

[Clint]

So now I realize I have no clue! Isn’t a micro lot 0.01 ?

Correct. 1 micro-lot = 0.01 standard lot.

If that is so then isn’t 14 Micro Lots = 0.14 ?

Correct again. 14 micro-lots = 0 .14 standard lot.

If that is so then what is 1 Mini Lot and 14 Micro Lots?

If your platform allows you to trade in [I]micro-lot increments[/I] (increments of 1,000 units of currency), then you can enter a 14-micro-lot position (that would be 14,000 units), and you will be [I]in compliance with the risk criterion you entered[/I] into the Position Size Calculator.

On the other hand, if your platform allows you to trade only in [I]mini-lot increments[/I] (increments of 10,000 units of currency), then you can enter a 1-mini-lot position (10,000 units), but not a 2-mini-lot position (20,000 units), because [I]2 mini-lots would exceed the risk criterion you entered[/I] into the Calculator.

Is it 0.24 ? Would that be the position size (add 0.14 to 0.10)
or is it something else?

No. The Calculator has given you [I]alternative position sizes.[/I] You will use [I]one[/I] of the three alternatives.

That is, [I]you cannot[/I] enter a 1-standard-lot position.

But, [I]you can[/I] enter a 1-mini-lot position.

[I]Or you can[/I] enter a 14-micro-lot position.

These are separate possibilities. They are not to be added together.

.

[eyedfondue]

So now I realize I have no clue! Isn’t a micro lot 0.01 ?
If that is so then isn’t 14 Micro Lots = 0.14 ?
If that is so then what is 1 Mini Lot and 14 Micro Lots?
Is it 0.24 ? Would that be the position size (add 0.14 to 0.10)
or is it something else?

Hi Cookie
For me all of the above is correct.
And as Clint mentioned (great explanation by the way) the calculator is giving you alternatives depending on whether you can trade micro lots or not.

[lexys]

what is 1 Mini Lot and 14 Micro Lots?

10 micro-lots = 1 mini-lot, so it’s the same as 2 mini-lots and 4 micro-lots: 24 micro-lots or 2.4 mini-lots.

this question should reveal that I am The Newbie!

Don’t worry: we all were, when we started (but some of us contain more carbohydrate than others ).

[Clint]

I consult the position size calculator …
It tells me:

Standard Lots 0
Mini Lots 1
Micro Lots 14

… what is 1 Mini Lot and 14 Micro Lots?
Is it 0.24 ? Would that be the position size (add 0.14 to 0.10)

No. The Calculator has given you [I]alternative position sizes.[/I] You will use [I]one[/I] of the three alternatives.

That is, [I]you cannot[/I] enter a 1-standard-lot position.

But, [I]you can[/I] enter a 1-mini-lot position.

[I]Or you can[/I] enter a 14-micro-lot position.

These are separate possibilities. They are not to be added together.

10 micro-lots = 1 mini-lot, so it’s the same as 2 mini-lots and 4 micro-lots: 24 micro-lots or 2.4 mini-lots.

You’re confusing the issue, Lexy.

The results returned by the Position Size Calculator [B]are not meant to be added together.[/B]

.

[goldencookie]

Thanks for the great answers!