Lot size determines how much currency you buy or sell in a trade and is a key factor in managing risk and reward. Knowing about lot sizes helps you control how much you’re risking on each trade.
What is a Lot Size?
A lot is a standardized trading unit in forex. The main lot sizes include:
- Standard lot: 100,000 units
- Mini lot: 10,000 units
- Micro lot: 1,000 units
- Nano lot: 100 units (offered by some brokers)
Choosing the right lot size depends on your trading experience, account size, and risk appetite.
How Lot Size Affects Your Trading
Your lot size impacts the value of each pip movement. For example, in a standard lot, one pip is roughly worth $10. In a micro lot, one pip equals about $0.10. Smaller lot sizes let you trade with lower risk, especially useful for beginners or those with smaller accounts.
Choosing the Right Lot Size
Starting with micro or mini lots is safer for new traders, allowing you to learn without risking too much capital. As your skills and account grow, you can increase your lot size to match your trading goals.
Conclusion
Understanding lot sizes allows you to control your exposure and manage risk better. At Axiory, we offer flexible lot options so you can trade at a scale that suits your strategy and comfort level.