When it comes to lot sizing for a small $100 Forex portfolio, many traders will opt for a micro lot.
This is because a micro lot allows for more flexibility when it comes to trade management.
For example, if a trader only has $100 in their account, they can trade 1 micro lot which is worth $0.10 per pip.
This means that each pip movement is only worth $1.00.Another advantage of trading micro lots is that it allows traders to better manage their risk.
For example, if a trader only wants to risk 2% of their account on any given trade, they can do so by trading 1 micro lot.
This way, even if the trade goes against them, they will not lose more than $2.00.Of course, there are also drawbacks to trading micro lots.
The main one is that it can be more difficult to make significant profits when compared to trading larger lots.
This is because the pip value is much smaller and therefore profits will be smaller as well. ultimately, what lot size is best for a small $100 Forex portfolio will come down to the individual trader’s goals and risk tolerance.
Some traders may be content with slower and steadier gains by trading micro lots, while others may prefer to take on more risk in order to achieve greater returns.
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