1 lot is 100,000 units of the base currency. If you're trading EUR/USD, 1 lot would be €100,000 EUR. If you're trading USD/JPY, 1 lot is $100,000 USD.
Lots are the way we measure our position size, or how much we're trading in the currencies market. It's like "shares" for stocks, or "contracts" for futures.
When you place a trade in Apiary Fund MetaTrader, you enter the number of lots you want to trade under "volume." You don't have to trade entire lots, though. You can trade fractions of a lot. In fact, in small accounts, it is inadvisable to trade a full lot. You should always calculate your position size based on how much you want to risk.
- 1.00 = Standard lot
- 0.10 = Mini lot (1/10th of a standard lot)
- 0.01 = Micro lot (1/100th of a standard lot)
Your position size can be any combination. You can trade 2.53. You can trade 0.24. Putting small amounts means the trade will win less, but it also means it will lose less.
A basic way to estimate your position size is to follow the Benjamin Formula. Divide your maximum risk by the distance (in points) from your entry to stop loss.