Lot Size

The quantity of currency in a trade; a standard lot is 100,000 units of the base currency.

Example

A mini lot is 10,000 units and a micro lot 1,000 units.

Lot size decides how much each pip is worth, so it must come from your risk plan, not from the leverage available.

Pip — The standard smallest price increment for a currency pair, usually 0.0001 for most pairs.
Position size — How much of your total capital a single holding represents - the weight that decides how much any given move actually matters to you.

Every currency trade is a bet on two countries at once — A forex position is always one currency against another. Retail traders usually hold it through leveraged broker products, while every international investor already holds currency risk without trading at all. (9 min)
Price moves, interest differences and leverage - in a market where one side's gain is the other's loss — Forex returns come from exchange-rate moves and interest-rate differences, magnified by leverage, in a market that is roughly zero-sum before costs and negative-sum after them. (12 min)
Appraising one trade: size it from the loss, not from the leverage — Before a currency trade, set how much of your account you will risk, where the trade is wrong, and what the broker and costs add. Position size follows from those, never from the maximum leverage available. (12 min)