Definition of a Lot in Forex

In forex, a micro lot equals 1/th of a lot or 1, units of the base currency.. A micro lot usually is the smallest position size that you can trade with. As new traders often do not have much in the way of starting capital, trading micro lots is a good way to keep the overall exposure of their trading account small.

The benchmark for forex trades is , units of the base currency, and since this trade size is the standard against which other trade sizes are measured, this is referred to as one Standard Lot. In the above chart, the price hit the Extreme zone at 1 pm and immediately reversed.

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