Hello everyone
I am confused when i open an account firstly i have to choose Standart-micro-mini etc.
and then MT4 has values from 0.1 to 100 sizes , which contains all kind of lots . So why do I have to choose ???
I will start with 1000$. And even though I know from experience and with the help of lot size calculator how much lots I need to place I want to fully understand what it means.
Hello Dennis, welcome to this forum.
In a standard account, you can trade only whole numbers of standard lots: one standard lot (100,000 units), two standard lots (200,000 units), etc. But, you cannot trade half of a standard lot (50,000 units), or 1.7 standard lots (170,000 units), etc.
In a mini account, you can trade only whole numbers of mini-lots: one mini-lot (10,000 units), two mini-lots (20,000 units), etc. But, you cannot trade one-fifth of a mini-lot (2,000 units), or 2.5 mini-lots (25,000 units), etc.
In a micro account, you can trade only whole numbers of micro-lots: one micro-lot (1,000 units), two micro-lots (2,000 units), etc. But, you cannot trade 0.3 micro-lots (300 units), or 3.2 micro-lots (3,200 units), etc.
In a nano account, you can trade only whole numbers of nano-lots: one nano-lot (100 units), two nano-lots (200 units), etc. But, you cannot trade 1.5 nano-lots (150 units), or 10.2 nano-lots (1,020 units), etc.
In a “cent account” or “unit account”, you can trade any number of units: one unit, 10 units, 75 units, 3,859 units, etc.
For a small account, such as the $1,000 account you are talking about, the smallest account type is the one you should open. You wouldn’t even be allowed to trade standard lots in a $1,000 account, because the minimum trade allowed in the platform would be 100 times the size of your account. And you should not consider trading mini-lots in your $1,000 account, because the smallest trade you could place (one mini-lot) would be 10 times the size of your account.
With a micro account, nano account, or unit account, you will have the ability to trade positions appropriate for the size of your ($1,000) account. A unit account, available from Oanda (and possibly from other brokers, as well), offers you maximum flexibility in a small account.
You mentioned the Position Size Calculator. You will notice that it gives equivalent position sizes in several formats (standard lots, mini-lots, micro-lots, and units). If you have a unit-account, you can place a trade for the exact number of units calculated. Otherwise, you have to round down to the nearest whole number of micro-lots, or mini-lots, as the case may be.
Lastly, lot sizes can be specified in terms of standard lots, and fractions of a standard lot, rather than in terms of mini-lots, micro-lots, etc., and this is what your MT4 platform is doing. Using this format —
0.01 means 0.01 standard lot, 0.1 means 0.1 standard lot, and 1.0 means 1 standard lot, etc.
0.01 = one micro-lot (0.01 x 100,000 units = 1,000 units)
0.02 = two micro-lots
etc.
0.1 = one mini-lot (0.1 x 100,000 units = 10,000 units)
0.2 = two mini-lots
etc.
1.0 = one standard lot (100,000 units)
2.0 = two standard lots
etc.
Here are two articles from Investopedia which might answer more of your questions —
Thank you Clint! Really appreciate
Swipe me, no wonder he was confused. Well done @Clint.
Stuff’s a lot simpler in the UK with our simple little spreadbetting deals.
@Clint I love your detailed and complete explanations. Are you in academia? What is your profession?
Thank you. This is very insightful.