what is a lot?

Forex is traded in specific amounts called lots. There are also a mini, micro, and nano lot sizes.

0.01 lot will cost you $0.10 per pip.

As a trader, it is advisable to know how much is needed for your Stop Loss or how much you’re willing to invest in each trade. This will help you to determine your trade sizes.

For example, a trade size of $0.10 per pip requires $20 for a 200 pips SL away from the entry price; similarly a trade size of $0.40 per pip requires $80 for a 200 pips SL away from the entry price. If your account can’t afford an ‘investment’ of $80 per trade, then a trade this size is too significant for your account.

It is important to note that pip value does not vary based on the amount of leverage used, but rather that the amount of leverage you have affects the pip value.