What is micro lot? Back to list

Member SinceJan 02, 2023

Posts 76


May 31, 2023 at 07:45
A micro lot, in the context of trading and finance, refers to a smaller unit of measurement used in determining the size of a position in a foreign exchange (Forex) trade. It represents 1,000 units of the base currency in a currency pair. In other words, it is one-tenth the size of a standard lot, which is typically 100,000 units.

Micro lots are commonly used by individual retail traders, particularly those who are new to Forex trading or have limited capital. They provide a more accessible and cost-effective option for traders to participate in the Forex market with lower risk exposure. With micro lots, traders can enter the market with smaller positions, allowing for more flexibility in managing risk and adjusting trade sizes.

By trading micro lots, traders can gain practical experience and test their strategies without putting significant capital at stake. Additionally, micro lots are often favored in markets with high volatility, where smaller trade sizes can still yield meaningful profits or losses.

It's important for traders to consider their risk tolerance, trading objectives, and account size when determining whether to use micro lots or larger position sizes in their Forex trades.

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