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Why Use Micro And Nano-Lot Brokers?

by Alex Hales

This post is intended for you if it is the first time you have come across the terms “micro-lot” or “nano-lot”. Regardless of whether you are familiar with the term’s micro and nano lots. It is possible that you may not understand all the advantages of utilizing these sizes of lots in your forex trading. Visit multibankfx.com

NANO LOT

A nano lot is equivalent to one hundred units of a base currency and is one-tenth the size of a micro lot as well as one-hundredth the size of a mini lot. When trading a nano lot, one pip of a currency pair that is denominated in U.S. dollars is equivalent to just $0.01 in value.

The Best Reasons to Trade Nano Lots

Your Beginning Steps Need Not Be Giant

Keeping your risk low in the beginning is essential, whether you are sure that Forex trading is for you, or you are just trying this trading thing out. You’re going to take baby steps at first. There is no difference in Forex trading. Due to the small size of a nano lot, even novice traders with a limited bankroll can begin trading with confidence. Starting with a tiny account is a smart way to keep your losses small while you are learning, even if you only have yourself to answer to. You should only risk more money once you have proven yourself on a smaller account.

Stress Mitigating

If your risk per trade exceeds the recommended level of 1%, you should consider cutting back. Nano lots allow you to adjust your lot size based on the specifics of each trade you make. No matter the size of your trading account, you are free to pick a stop loss level that is appropriate for the type of trade you are making.

Assess the efficacy of a method to see if it suits your needs.

You won’t know for sure unless you invest a substantial sum of money. It’s possible that you’ll uncover a system that works well in back testsand performs well in demo trading. But when even a little bit of money is at stake, you become nervous and unable to speak. Finding out whether a forex trading strategy can be used in real-world settings requires risking only a modest amount of capital. What you find out could surprise you.

The Best Method

No matter how much experience you get or how much larger your lot sizes become, you are bound to have some bumps along the trading road. That’s just the way business operates. Experiencing failure like that can leave you feeling disheartened and hesitant to act boldly in your future trades. If you’ve lost your mojo, scaling back to micro lots can help you get back into the swing of things.

Expanding Your Horizons Is Always an Option

Don’t allow the small size of nano lots to discourage you from trading larger ones. Simply type in “100,000 nano lots” and you’ll be all set. The versatility offered by nano lots is crucial.

MICRO LOT

Trading in micro-lots on the forex market offers currency traders a great number of advantages. The demo trading of forex can be utilized as a steppingstone toward the full-scale lot trading that can be done with micro lot trading. Numerous advantages come along with trading micro lots in the foreign exchange market, and this article will discuss each of these advantages in detail.

Your forex trading will be able to advance on the right path toward full-scale lot trading with the assistance of the extensive list of benefits that

comes with trading micro and nano lots.

The Best Reasons to Trade Micro Lots

Demo Trade Prior to Micro Lot Trading

If you already have a forex trading strategy that you enjoy using, the first thing you should do is practice using it on a demo account until you are confident in your ability to use it profitably and consistently. You are prepared to start trading micro lots once you have located a profitable trading method and proven that you can use that system profitably in a simulated trading environment. If you are unable to demonstrate that your trading system is successful using a demo account, you will need to find a trading system that is suitable for you and that demonstrates a track record of profitable demo trades before moving on to micro lot trading.

Trading in Micro Lots Is Going Forward

Micro lot trading on the forex market provides investors with an opportunity to trade with real money while limiting their exposure to financial loss. The easiest technique for forex traders to start trading with real money while scaling up to full size lots is to enter trades with 2-4 micro lots with a stop order.

This should be done after successful practice trading with virtual funds. While simultaneously increasing your skill set for initiating and handling trades involving real money, this constitutes astute money management. If everything goes according to plan, you can make a commitment to trading 6, 8, or 10 micro lots. Aand then gradually increase your volume until you are trading full size lots.

To continue testing your forex trading approach while maintaining a modest level of exposure to risk. Every trader can trade small sums of real money, up to two micro lots, using a stop order. When compared to trading with small lots or even ordinary lots, trading with micro lots affords you a significantly greater degree of maneuverability in the management of your deals.

Best For Position Sizing and Leverage

You can learn about position sizing in a live trading account by using micro lots. Which involves a modest level of risk. When you trade micro lots, you may easily gain an understanding of leverage and margin. All you must do is observe how the balance of your account changes while you are engaged in a live micro lot deal. You can keep an eye on your balance, equity, margin amount, free margin. As well as profit or loss values while you are engaged in live micro lot trading. This provides excellent instructional value for any future live trades you may participate in.

The Bottom Line

Even if you become successful enough to trade standard lots and switch brokers, keep a nano-lot account open. You can use it for testing or recovering from a losing streak. The benefits of forex micro lot trading are evident, especially when managing live deals. After sample trading, trading micro lots will teach you techniques like profit management that will help your account grow. You may use micro lots on larger trades.

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