Lot Pip Point
Contract size (Lot) – is the trading amount/quantity for exchanging currencies.
The common size are micro, mini and standard. The standard Lot is equal to 100,000 units while mini is equal to 10,000 units and micro is equal to 1,000 units.
|100,000||1.00 Lot||Standard Lot||$10|
|10,000||0.10 Lot||Mini Lot||$1.0|
|1,000||0.01 Lot||Micro Lot||$0.1|
Pip – by standard, is the smallest number in a quotation of a currency.
The quotation of EUR/USD is 1.12518, a pip is represented by 0.0001. If the price moves from 1.12518 to 1.12568, the market moved 5 pips.
Point – not till recently most currency pairs were quoted till 4th decimal place i.e. EUR/USD 1.1251 but since the introduction of 5th decimal place, the 5th digit is called a point i.e. EUR/USD 1.1251(8).
The quotation of EUR/USD is 1.12518, a pip is represented by 0.0001, and point is represented by 0.0000(1). If the price moves from 1.12518 to 1.12568, the market moved 5 pips or 50 points.