Lots (in Trading)
Standardized units of measurement for trade size in Forex (e.g., micro, mini, standard).

What Are Lots (in Forex Trading)?
In Forex trading, "lots" are just a way to measure how much currency you’re buying or selling in a trade. Think of it like buying items in bulk—the "lot" is the size of your order.
How Lots Work
- Standardized Units: A "lot" is a fixed amount of currency, so everyone knows exactly how much is being traded.
- Lot Sizes: There are different sizes, like micro (smallest), mini (medium), and standard (largest). For example, a standard lot equals 100,000 units of currency.
- Risk Control: By choosing the right lot size, you can control how much money you’re putting into a trade and how much risk you’re taking on.
Example
- Nano Lot:
100 units of the base currency (offered by some brokers, often for beginner traders).
- Micro Lot:
A micro lot is the smallest trade size, equal to 1,000 units of the base currency. If you're trading EUR/USD, a micro lot would be 1,000 euros.
Risk: If the EUR/USD pair moves by 1 pip (a small price movement), the profit or loss for a micro lot would be 0.10 USD. - Mini Lot:
A mini lot is 10,000 units of the base currency. In the EUR/USD pair, this would be 10,000 euros.
Risk: A 1-pip movement in EUR/USD would result in a profit or loss of 1 USD. - Standard Lot:
A standard lot is the largest size, equal to 100,000 units of the base currency. For EUR/USD, this would be 100,000 euros.
Risk: A 1-pip move in EUR/USD would result in a profit or loss of 10 USD.
In Short, Lots define the size of your Forex trade and you can choose between nano, micro, mini, and standard lot sizes.
Other terms in this Category.