A currency pair lot is a fixed amount of 100,000 fundamental units. By comparing the lot prices, the broker establishes how much collateral will be held. Cost is determined by value. There can be two trades of one lot each; the differing amounts are not permitted. If the asset's price is higher, the trade will be more risky and the margin amount will be higher.
For a trader to efficiently manage risk and other relevant aspects, such as the right amount of leverage to use for their trading account, determining the right lot size can be extremely critical. It is nearly as important as picking which direction traders should take.