Contract Size (Forex)

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Definition
In forex trading, the standardized amount of the base currency is represented by a single lot (e.g., standard lots are 100,000 units).

Example
One standard lot of EUR/USD represents 100,000 Euros.

Key Points

  • Value per Pip: Contract size directly impacts the dollar value of each pip movement in the currency pair.
  • Risk Management: Understanding contract size is crucial for calculating trade risk and appropriate position sizing.

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