Resolved Question
How many lots would a normal trade consist of?
I’ve been trading in a demo account for about two weeks and up until now I'm still able to trade only one lot. I’m a bit worried because some traders I know have been trading multiple lots.
over 2 years ago
Best Answer - Chosen by Asker
First of all, the term "normal" is a very relative term. What may be normal for you may not be normal for another trade. Some traders like to trader multiple lots because they are comfortable with how much they are risking. Some traders may trade with smaller positions but wider stop losses. Scalpers may like trading multiple lots to try and make more on short term trades. In the end, you have to consider what strategy you are employing. You have to consider your entry and exit points - will you trade multiple lots but have a tight stop loss? Or would you rather trade a smaller position but have a wider stop loss? Do you want to scale in if the trade goes against you, so that you get a better average price? Or would you rather add to your position only if the trade is going your way? you should try all these scenarios and find out what you are most comfortable with. Besides, you are still on a demo account - this is the time to learn! Hope this was helpful :)
over 2 years ago
Answers (2)
It all depends on your strategy and what you're comfortable with. Some traders set up multiple lots to enable them to exit (or enter) the market at multiple points (different profit targets). This enables them to gather more pips if the trade goes their way. Some move their stop loss to their entry price once their first profit target is hit to ensure a "risk free trade." Of course, there is always a downside. If price, say, hits your first profit target but suddenly reverses and hits the stop loss of your second position, you end up not getting as much profit as you would if you had only one lot. As you can see, it's all up to you and what your strategy is!
over 2 years ago
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There’s no such thing as a normal trading lot although trading multiple lots can give advantage to a trader. To answer your question, always base your trading lot on your risk tolerance. Just like entering a trade, you must know first the limit of your loss.
over 2 years ago
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