1. What is a lot in trading?

A lot is a unit of value that measures the amount of a transaction. It is often the size of a financial contract. In other words, depending on the number of lots you trade, the amount invested will be greater or lesser. More the number of lots is important, more the amount invested is important and vice versa.

2. Why use micro lots?

Micro lots: These are a fraction of the price of an asset. It is a very small lot size that allows you to trade almost any asset with a smaller capital. It is equivalent to 0.01 lot or 1000 units. This is often equivalent to $0.1 in Forex. This is the minimum trade size.

They allow you to limit the risks inherent in trading as much as possible, to limit the risk of losses and leverage. Micro lots are therefore strongly recommended for beginner traders. A micro lot is 1,000 units of the base currency, or (0.01 lot) on your MT4 platform.