In order to speak about money management, one must also take into account “a standard lot.
” What is the standard lot? It is simply the equivalent to 100,000 units of the quote currency in a forex trade.
A standard lot is one of three “lot” measurements in forex: the other two are mini-lot and micro-lot. Whereas a standard lot is 100,000 units of any given currency, a mini-lot is 10,000 units and a micro-lot is 1,000 units.
For example, if one wishes to buy 100,000 U.S. Dollars, then one would purchase a standard lot (100,000 units).
One pip movement for a standard lot is equal to a $10 change. In order to effectively manage trades and be able to buy inappropriate increments, it is important to know about standard lot.