Standard Hand vs. Mini Hand in Forex Trading

2023-06-05
Summary:

Discover the difference between "standard lots" and "mini lots" in forex trading. Learn more about these terms and how they impact your trading strategy.

The standard hand in forex trading is a unit used to measure Currency Trading volume, usually equal to 100000 units of base currency. For example, in an EUR/USD currency pair, trading 1 standard hand means buying or selling 100000 euros. The emergence of this concept is mainly for the convenience of traders in comparing and calculating between different currency pairs, and also because the trading volume in the forex market is large, and the number of single trade is usually large. In addition to the standard hand, there are also units such as mini hands and micro hands, which are equal to one tenth and one percent of the standard hand, respectively, which can better meet the needs of small investors.


A mini hand is a unit of currency trading volume, usually equal to 10000 base currency units.

For example, in a currency pair between the euro and the US dollar, a one hand mini trade equals a buy or sell of 10000 euros.


In contrast, the standard hand is the most common trading unit in the forex market, typically equivalent to 100000 base currency units. Using mini hand trading allows investors to enter the market with a smaller trading volume, thereby better controlling risks and providing more practical opportunities for beginners.


It should be noted that despite the small scale of mini hand trading, it still involves the same base currency and quotation currency as standard hand trading, thus having a similar level of risk and return as standard hand trading.


In the forex trading market, the trading units for forex trading are called standard hands (Lots). 1 standard lot=100000 units. Additionally, there is one mini hand (MiniLot=10000 units; 1 Micro Lot=1000 units; 1 Nano Lot=100 units.

Lot size in foreign exchange trading

When the US dollar (USD) is used as the base currency in a currency pair

Example 1: If we trade a standard hand USD/CHF at an exchange rate of 1.2020, then the one basis point value of the USD/CHF currency pair= (0001 ÷ 1.2020) × 100000=$8.19;

Example 2: Assuming we trade a standard hand USD/JPY at an exchange rate of 123.15, then the one basis point value of the USD/JPY currency pair is (01 ÷ 123.15) × 100000=$8.12.


When the US dollar is used as the relative currency in a currency pair:

For example: AUD/USD; GBP/USD; 1 basis point value of EUR/USD, etc.=0.0001 ×  100000=$10.

It is worth noting that when the US dollar is used as the base currency in a currency pair, the base point value of the currency pair will vary with the fluctuation of the exchange rate. However, when the US dollar is used as the relative currency in a currency pair, regardless of whether the exchange rate of the currency pair changes, the base point value of a standard hand currency pair is $10.


Choosing standard hand or mini hand trading should be determined based on factors such as one's trading strategy, financial strength, and risk tolerance.


【 EBC Platform Risk Reminder and Disclaimer 】: There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice.

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Disclaimer: EBC Financial Group explicitly does not participate in any cryptocurrency activities or offer Crypto Contracts for Difference (CFDs). Our financial services solely pertain to traditional instruments. Clients are advised that any references to crypto-related services using the EBC name are inaccurate and unauthorized. Any reference to past performance is not indicative of future performance. The information contained in this website is provided for reference only and does not constitute any investment advice.
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Compliance Disclosure：The website can be accessed globally and is not specific to any entity. Your actual rights and obligations will be determined based on the entity and jurisdiction that you choose to be regulated.There may be local laws and regulations which prohibit or limit your rights to access, download, distribute, disseminate, share or otherwise use any or all of the documents and information published on this website.
Risk Warning: Trading Contracts for Difference (CFDs) are complex financial instruments and come with a high risk of losing money rapidly due to leverage. Trade on margin carries a high level of risk and may not be suitable for all investors. Before deciding to trade Forex and CFDs, you should carefully consider your trading objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial trading capital. We recommend that you seek independent advice and ensure you fully understand the risks involved before making any investment decision. Please read the relevant risk disclosure statements carefully before trading.
EBC Financial Group is a co-brand shared by a group of entities including:
EBC Financial Group (SVG) LLC is authorized by the St.Vincent and the Grenadines Financial Services Authority(SVGFSA),and the company registration number is 353 LLC 2020. with registered address at Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines.
Other Relevant Entities
EBC Financial Group (UK) Limited is authorised and regulated by the Financial Conduct Authority. Reference Number: 927552. Website: www.ebcfin.co.uk
EBC Financial Group (Australia) Pty Ltd (ACN: 619 073 237) is authorised and regulated by the Australian Securities and Investments Commission (Number: 500991). EBC Financial Group (Australia) Pty Ltd is a related entity of EBC Financial Group (SVG) LLC and are managed separately. EBC Financial Group (Australia) Pty Ltd provides general financial advise services in Australia.
EBC Financial Group (Cayman) Limited is licensed and regulated by the Cayman Islands Monetary Authority (Number: 2038223). Website: www.ebcgroup.ky
Business Address: The Leadenhall Building, 122 Leadenhall Street, London, United Kingdom, EC3V 4AB. Email Address : [email protected]. Telephone : +44 20 3376 9662
Disclaimer: EBC Financial Group explicitly does not participate in any cryptocurrency activities or offer Crypto Contracts for Difference (CFDs). Our financial services solely pertain to traditional instruments. Clients are advised that any references to crypto-related services using the EBC name are inaccurate and unauthorized. Any reference to past performance is not indicative of future performance. The information contained in this website is provided for reference only and does not constitute any investment advice.
Regional Restrictions: EBC does not offer any services to citizens and residents of certain jurisdictions including: Afghanistan, Belarus, Burma (Myanmar), Canada, Central African Republic, Congo, Cuba, Democratic Republic of the Congo, Eritrea, Haiti, Iran, Iraq, Lebanon, Libya, Malaysia, Mali, North Korea (Democratic People's Republic of Korea), Russia, Somalia, Sudan, South Sudan, Syria, Ukraine (including Crimea, Donetsk, and Luhansk Regions), the United States, Venezuela, and Yemen. For more information, please check out our FAQs.
Compliance Disclosure：The website can be accessed globally and is not specific to any entity. Your actual rights and obligations will be determined based on the entity and jurisdiction that you choose to be regulated.There may be local laws and regulations which prohibit or limit your rights to access, download, distribute, disseminate, share or otherwise use any or all of the documents and information published on this website.
Risk Warning: Trading Contracts for Difference (CFDs) are complex financial instruments and come with a high risk of losing money rapidly due to leverage. Trade on margin carries a high level of risk and may not be suitable for all investors. Before deciding to trade Forex and CFDs, you should carefully consider your trading objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial trading capital. We recommend that you seek independent advice and ensure you fully understand the risks involved before making any investment decision. Please read the relevant risk disclosure statements carefully before trading.
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