What is a Micro Lot in Forex
What Exactly is a Micro Lot?
A micro lot is 1,000 units of the base currency in a forex trade. For example, if you trade EUR/USD, one micro lot means you are buying or selling 1,000 euros. This is the smallest standard lot size offered by most brokers, making it perfect for beginners and traders with limited capital.
Why Micro Lots Matter for Bangladesh Traders
In Bangladesh, many traders start with small deposits because of limited disposable income. Micro lots allow you to trade with very low risk. For instance, with a $10 deposit (about 1,200 BDT), you can open micro lot trades and control a position worth $1,000 using leverage. Each pip movement in a micro lot is worth about $0.10 (12 BDT), so even small price changes have manageable impact on your account.
How Micro Lots Work with Leverage
Most brokers offer leverage up to 1:100 or 1:500 for micro lots. With 1:100 leverage, to trade one micro lot of EUR/USD, you need only $1 of margin (about 120 BDT). This low margin requirement means you can open multiple micro lot positions with a small account balance. However, leverage amplifies both profits and losses, so risk management is crucial.
Micro Lot vs Mini Lot vs Standard Lot
To put it in perspective: one standard lot = 100,000 units (pip value ~$10), one mini lot = 10,000 units (pip value ~$1), and one micro lot = 1,000 units (pip value ~$0.10). For a Bangladesh trader with a 5,000 BDT account, trading a micro lot means risking only 12 BDT per pip, while a mini lot would risk 120 BDT per pip — a much larger commitment.