In Forex trading, a lot represents the amount of currency you’re actually buying or selling. Instead of trading single units, you trade fixed “boxes” of currency: a standard lot (100,000 units), a mini lot (10,000 units), or a micro lot (1,000 units). Lot size directly impacts how much you can gain or lose per pip, so understanding it helps you feel more prepared for trading outcomes.

Lots also keep trading standardized and straightforward; you can place “1 lot” instead of typing out large numbers. When used with leverage, which allows you to control larger positions with a smaller deposit, lot sizing becomes vital for managing both potential gains and risks, as leverage can magnify profits and losses.