Micro Lot
A micro lot is a small standardised trade size, typically used in forex. It is commonly 1,000 units of the base currency, often shown as 0.01 lots.
In plain English: "A micro lot is one-hundredth of a standard lot."
Micro lots are popular because they let you practise with real market conditions while keeping the money impact small.
What Is a Micro Lot?
In spot forex, lot sizes are typically defined like this:
| Lot type | Typical size | Platform label |
|---|---|---|
| Standard lot | 100,000 units | 1.00 |
| Mini lot | 10,000 units | 0.10 |
| Micro lot | 1,000 units | 0.01 |
| Nano lot | 100 units | 0.001 |
⚠️ Instrument Specification Matters
On CFDs, "0.01 lot" may not map to 1,000 units. Always check the contract specification for the instrument you're trading.
Micro Lot vs Mini Lot vs Standard Lot
- Micro lot (0.01): typically 1,000 units → 100× smaller than standard.
- Mini lot (0.10): typically 10,000 units → 10× smaller than standard.
- Standard lot (1.00): typically 100,000 units → larger pip value.
💡 Scaling Idea
If you scale from 0.01 lots to 0.05 lots, you increase your size by 5× — your pip value and P&L per pip also increase by about 5× (ignoring conversion differences).
Why Micro Lots Help With Risk
Micro lots typically create smaller pip values, which helps you keep losses manageable while learning. The goal is to size trades so normal volatility does not wipe out your account.
- Lower P&L swing per pip: easier to stick to your plan.
- More room for realistic stops: you can place stops where the market "makes sense", not where your account forces you.
- Better habit-building: you can practise position sizing, stops, and journaling without huge emotional pressure.
⚠️ Critical Point
Micro lots don't automatically make trading safe. If your stop is too wide or you take too many trades, losses can still add up. Use consistent risk per trade (e.g., 0.5%–1%) as your baseline.
Examples: Micro Lots in Practice
Example 1: Position size
You buy 0.01 lots of EUR/USD → roughly 1,000 EUR notional exposure.
Example 2: Risk in money terms
If your stop-loss is 30 pips away, your total risk is approximately: pip value × 30 (plus spread/fees). With micro lots, that pip value is often small.
Example 3: Scaling up carefully
If you move from 0.01 to 0.02 lots, you double your size. That can be a sensible step-up once your execution and discipline are stable.
When Does a Micro Lot Make Sense?
Micro lots are often useful when:
- You are new and want realistic execution with small P&L swings.
- Your account is small and you need tighter risk control.
- You are testing a strategy and want clean performance data without over-leverage.
- You trade instruments with higher volatility, where stops need to be wider.
⚠️ Practical Tip
If you find yourself moving stops, revenge trading, or feeling stressed by small moves, reduce size. Micro lots are designed for this.
Common Misconceptions
- "Micro lots are for small traders only."
Even experienced traders use small sizing for testing, scaling in, or volatile periods. - "If I use micro lots, I don't need a stop-loss."
You still need risk limits. Small size helps, but it doesn't replace discipline. - "Micro lot = fixed pip value."
Pip value still varies by pair and account currency. Always check the ticket.
✅ Quick Checkpoint
Try answering before expanding the model answers.
1) What is a micro lot in spot forex?
Typically 1,000 units of the base currency, shown as 0.01 lots.
2) How does a micro lot compare to a mini lot?
It is one-tenth the size (0.01 vs 0.10; typically 1,000 vs 10,000 units).
3) Why do many beginners start with micro lots?
Because micro lots reduce pip value and keep money swings smaller while learning.
Next lesson: Nano lot.
Frequently Asked Questions: Micro Lots
Can I trade 0.01 lots on all brokers?
Many brokers allow 0.01-lot minimums, but not all. Some allow even smaller (0.001) or unit-based sizing. Check your broker's minimum trade size.
Are micro lots the same in CFDs?
Not necessarily. CFD contract sizes vary by instrument and broker. Always confirm what "0.01 lot" represents for that specific market.
Does micro-lot trading avoid margin calls?
It reduces risk if sized sensibly, but margin calls can still happen if you over-leverage, trade too many positions, or hold through volatility.
How should I choose micro-lot size for my stop-loss?
Use risk-based sizing: choose your money risk (e.g., 1% of your account), then select the lot size that makes that risk match your stop distance.
Summary
A micro lot is typically 1,000 units in spot forex (0.01 lots). It keeps pip value and P&L swings smaller, which helps beginners practise real trading conditions with better risk control.
Next lesson: Nano lot.