Lot Size
The quantity or volume of an asset you are buying or selling in a single trade.
Plain-English Meaning
In trading, assets are grouped into standard batches called "lots." Instead of buying exactly 10,000 units of currency, you buy a "Mini Lot." The lot size dictates how large your position is in the market.
Why It Matters
Your lot size directly controls your risk. A larger lot size means larger potential profits, but also larger potential losses. Selecting the correct lot size is the most critical step before entering a trade.
Simple Example
A Standard Lot in forex is 100,000 units (1.00). A Mini Lot is 10,000 units (0.10). A Micro Lot is 1,000 units (0.01).
This educational example uses selected assumptions for reference calculation purposes. Real conditions may vary by broker, exchange, or instrument.
Beginner Mistake
Trading lot sizes that are too large for the account balance. Even a small price movement against a very large lot size can result in a significant loss.