A micro lot in forex refers to a trade size that is equivalent to 1,000 units of the base currency in a trade. It is one of the smallest trade sizes that is typically available for trading in the foreign exchange market and is often used by traders with smaller accounts who are just starting out in the market and do not want to trade with large amounts of capital.
For example, if you are trading the EUR/USD pair and you buy one micro lot, you would be buying 1,000 euros. The value of a micro lot can vary based on the exchange rate of the currency pair you are trading, but it is generally much smaller than the value of a standard lot or a mini lot.
It’s important to note that while trading with smaller lot sizes can potentially result in smaller losses, it can also limit the potential for profits. Traders must take into account the leverage that is being used in their trades when calculating the value of a micro lot, and they should carefully consider the risks involved in forex trading before making any investment decisions. Additionally, micro lots may not be available for all currency pairs or with all forex brokers, so it’s important to check with your broker to see what trade sizes are available.