A lot is a unit of measuring to indicate trading sizes. On the forex platform, 1 standard lot constitutes 100,000 units of currency, usually represented in US Dollars. So if you want to buy 1 lot of USD/JPY, it means you trade with a size of $100,000.
Over the years, trading lots have been categorized into many different types to make it easier for small-cap traders. The most common lots in the market now are:
- Standard lot: 1 (100,000 unit currency)
- Mini lot: 0.1 (10,000 unit currency)
- Micro lot: 0.01 (1,000 unit currency)
There's also a Nano lot that represents 0.001 (100 unit currency), but brokers that provide such a trading size are quite rare.