One standard lot equals 100,000 units of the base currency.
Some forex brokers will allow you to trade mini-lots that contain of 10,000 units and even micro-lots that are just 1,000-units.
|EURUSD currency pair LOT size||Definition||Equivalent in USD|
In practice this means that the minimum volume of your contract must be 100,000 x the current purchase exchange rate. Say for example the current exchange rate of EURUSD is 1,2415 …100,000 x 1,2415 = 124,150 USD will be theoretical value of 1 standard LOT.
However, you do not need to have such an astronomical amount of money in your trading account! In fact you just need a fraction of 1/50 or 1/200 or even 1:500 thanks to a leverage that your broker gives you. You can read more in the article where we explain you how leverage trading works.
As you learn in above example, standard lots may not acceptable for small traders, so some forex brokers offer mini or even micro lots.
For example, the popular HotForex platform allows you to trade only 1 micro lot which contains only 1000 units!
You can buy or sell as many lots as you can with your financial situation, but the minimum is always 1 Lot (or Mini or Micro Lot – depends on Broker). Before opening a trading position, you must always think about how many lots you buy / sell. If you want to calculate the value of one pip, click on the pip calculator.