Market Structure
Micro Lot
A position of 1,000 units of the base currency, one hundredth of a standard lot.
What Micro Lot means
A micro lot is 1,000 units of the base currency, shown as 0.01 in the volume field. It is the smallest size most retail brokers accept and gives a pip value of about 10 US cents on pairs quoted in dollars. Micro lots allow a trader with a few hundred dollars to run genuine risk management, keeping any single trade to a small percentage of the account while still using a technically sensible stop distance.
They are also the standard way to test a strategy with real money after demo trading, since live execution, swap and psychology cannot be reproduced on a demo account. The limitation is that fixed costs dominate: a commission with a minimum charge per ticket, or a two pip fixed spread, is a large fraction of the expected profit on a micro position. Check whether the broker's commission scales down proportionally at this size.
Worked example
One micro lot of USD/JPY is 1,000 US dollars of notional; at 152.40 each pip is 10 yen, worth roughly 6.6 US cents.
Related terms
- LotThe standard unit of trade size in forex, measured in units of the base currency.
- Mini LotA position of 10,000 units of the base currency, one tenth of a standard lot.
- Standard LotA position of 100,000 units of the base currency, the benchmark trade size in forex.
- Demo AccountA simulated trading account funded with virtual money, used to learn a platform and test strategies without financial risk.
- Risk Per TradeThe share of account equity a trader is prepared to lose on a single position, normally expressed as a percentage.
Frequently asked questions
What does Micro Lot mean in forex trading?
A position of 1,000 units of the base currency, one hundredth of a standard lot.
How does Micro Lot work in practice?
They are also the standard way to test a strategy with real money after demo trading, since live execution, swap and psychology cannot be reproduced on a demo account. The limitation is that fixed costs dominate: a commission with a minimum charge per ticket, or a two pip fixed spread, is a large fraction of the expected profit on a micro position. Check whether the broker's commission scales down proportionally at this size.
What is an example of Micro Lot?
One micro lot of USD/JPY is 1,000 US dollars of notional; at 152.40 each pip is 10 yen, worth roughly 6.6 US cents.
Trade with a regulated broker
Understanding the terminology is the cheap part. The expensive part is choosing a counterparty whose execution, financing and withdrawal behaviour match what the marketing implies. Every broker below has been reviewed with a funded live account, and each review states which legal entity and which regulator applies to the account you would actually open.
Check the licence on the regulator's own register before you deposit — our regulators directory explains what each authority enforces, from leverage caps to compensation limits.