Lot

A lot is the standardized unit for measuring trade size in forex. One standard lot equals 100,000 units of the base currency. A mini lot is 10,000 units, a micro lot is 1,000 units, and some brokers offer nano lots of 100 units. Your lot size directly determines how much each pip movement is worth in monetary terms.

On EUR/USD, one pip on a standard lot is roughly $10. On a mini lot, it's about $1. On a micro lot, it's around $0.10. This scaling is why lot selection is central to position sizing and risk management. A 50-pip stop loss on a standard lot risks $500; the same stop loss on a micro lot risks only $5.

Most beginners should start with micro lots. They let you trade real money and experience real emotions while keeping the financial risk manageable. A $500 account trading micro lots with proper position sizing can survive a string of losses and provide a genuine learning experience without the account-ending blowouts that come from oversized positions.