What is a lot in Zulutrade?
If you have ever been interested in knowing more about how to invest in currencies you probably have read the term lots. Or maybe you are interested in the copy trading on Forex, maybe you have opened an account on a platform like Zulutrade and have been managing it for a while, but you do not understand what a lot is or how to assign lots to each trader.
If you are in one of these cases, you have come to the right place, because after reading this article you will have a clear idea of what a lot is and how you should configure it.
To better understand the concept, we recommend that you use a demo account in Zulutrade to follow the steps. (post about zulutrade lot).
What is a lot (also Zulutrade lot)?
Let’s start with the definition:
A standard lot is a unit of purchase or sale. Keep in mind that we are talking about currencies, so you probably wonder how much a standard lot equals. Very simple, a standard lot equals 100,000 units of the traded currency.
Now, when you set up your account in Zulutrade you will see that there are three options in the “Lot size” section: Micro, Mini and Standard, as you can see in the following image.
We have just seen that a standard lot is equivalent to 100,000 units of currency. How much will a mini lot or a micro lot be? Very easy, a Mini Lot equals 10,000 units and a Micro Lot equals 1,000 units. Saying I bought 10 Mini Lots would be the same as saying that I bought 1 Standard Lot.
You should know that in Zulutrade the lot size that comes by default is the Mini Lot. So every time you start to follow a trader, you have to choose how many Mini Lots you want to assign him. By default you will get 0.1 Mini Lot, as you can see in the following image:
As you add more traders (see Ranking) to your portfolio you will realize that it is very important to know how many lots you owe or can assign to each one to maximize the profits and limit the risk. Once you have created your portfolio with different traders, you can go to Settings to choose how many lots you assign to each of them. This is what you’ll see:
To know how many lots you can assign to each trader the best way is to use the margin call-o-meter, an ideal tool to control the risks in Zulutrade.
By moving the margin bar call-o-meter (MCoM) the lots are automatically assigned to each of the traders. It is often said that below the level of 40% in the MCoM bar is a conservative allocation of lots. Between 40 and 60% is an average allocation and over 60% is an aggressive strategy.
At the highest level allowed, more lots will be assigned to each one of the traders. (info about zulutrade lot).
Congratulations! Now you know what a lot is and how you must set up your account in Zulutrade to get the best performance and minimize the risk. We invite you to make a demo account in Zulutrade with us (If you want, here we explain it step by step) and you can apply everything you have learned.
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The Zulu4me team