A lot is the unit of trade size in forex. Choosing the right lot size is how you control exactly how much money each pip is worth — and therefore how much you risk.
The four standard sizes
A standard lot is 100,000 units of the base currency. A mini lot is 10,000 units, a micro lot is 1,000, and a nano lot is 100. Most beginners should trade micro lots while learning, because the money risked per pip is small enough to survive mistakes.
Lot size to pip value
On a standard lot of a USD-quoted pair, one pip is roughly $10. On a mini lot it's about $1, on a micro lot about $0.10. This direct link between lot size and pip value is the lever you use to set risk: smaller lots mean smaller swings in your account.
Why starting small is not weakness
The trader who survives long enough to get good is the one who sized small early. Trading micro lots while you build a track record is the disciplined choice, not a beginner's limitation.
Key takeaways
- Standard 100k, mini 10k, micro 1k, nano 100 units of the base currency.
- Pip value scales with lot size (~$10 / $1 / $0.10 per pip).
- Trade micro lots while learning to keep mistakes survivable.