Understanding how to calculate trading volume allows for quick and informed decision making when opening trades. It also enables clients to set goals to achieve premier status. Let’s look at what trading volume is and how we could calculate it. Trading volume (TV) is the amount of base currency the trader is trading with. Calculating trading volume is very important to forex calculation because it is used in other important calculations such as margin and pip value.
Lot and contract size
Lot refers to the standard unit size of a transaction. A standard lot is typically equal to 100 000 units of the base currency, but there are several lot types available:
Standard lot: 1 lot = 100 000 units
Mini lot: 0.1 lot = 10 000 units
Micro lot: 0.01 lot = 1 000 units
Nano lot: 0.001 lot = 100 units
Contract size is a fixed value which denotes the amount of base currency in 1 lot. It varies based on the trading instrument.
Formula for calculating trading volume
Trading volume is calculated using the following formula:
Trading volume (TV) = Number of lots x contract size
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