A lot is the standard unit of measurement for a Forex trade. There are three main types of lots:
Standard Lot: Equal to 100,000 units of the base currency.
Mini Lot: Equal to 10,000 units of the base currency.
Micro Lot: Equal to 1,000 units of the base currency.
For example, if you trade 1 standard lot of EUR/USD, you are trading 100,000 euros. Understanding lot sizes helps you manage risk effectively, as larger lot sizes mean higher exposure to market movements.
