Choosing the lot size that best balances opportunity and risk is a critical personal decision. After considering their risk tolerance and trading goals, traders can explain their lot size options using a risk-management calculator.
A lot is a unit of measurement used in the Forex market to standardize trade size. Pips are very small measurements that represent the fourth decimal place when comparing the value of one currency to another. Because trading a single unit was impractical, "lots" were created to allow traders to trade these minor changes in groups.