Typically, there are four distinct lot sizes in FX trading. Each of them can be suitable for different strategies. For example, the standard lot is more effective for position traders, while other, more short-term strategies could benefit more from using mini lots. 

These are the four distinct lot sizes in FX:

• Standard Lot: A standard lot is the largest lot size and represents 100,000 units of the base currency in a currency pair. For example, if you're trading the EUR/USD currency pair and you open a position with a standard lot size, you are effectively buying or selling 100,000 euros
• Mini Lot: A mini lot is one-tenth the size of a standard lot, representing 10,000 units of the base currency. Using the EUR/USD example, trading with a mini lot would mean buying or selling 10,000 euros
• Micro Lot: A micro lot is one-tenth the size of a mini lot and represents 1,000 units of the base currency. So, if you trade with a micro lot in the EUR/USD pair, you are trading 1,000 euros
• Nano Lot: A nano lot is the smallest lot size available and represents 100 units of the base currency. By trading a nano lot in the EUR/USD pair, you are trading 100 euros 

It's important to note that lot size also affects the pip value of a trade. A pip is the smallest price increment in forex, and its value varies depending on the lot size:

In a standard lot, each pip movement is typically worth $10 (in the case of most major currency pairs).

In a mini lot, each pip movement is usually worth $1

In a micro lot, each pip movement is typically worth $0.10

In a nano lot, each pip movement is worth $0.01.

Traders can choose their preferred lot sizes and weigh the risk/reward of each trade in order to increase their chances of success. 

Choosing The Right Lot Size

Choosing the correct lot size for a particular trade can be easier said than done. The market moves at breakneck speeds and traders don’t have much time to ponder the details before making a decision. 

However, there is a useful formula that can help you quickly decide on the adequate lot size for your forex trades:

Lot Size = (Risk Amount in Dollars) / (Stop-Loss in Pips * Pip Value)

• Risk Amount in Dollars: The dollar amount you're willing to risk on the trade
• Stop-Loss in Pips: The number of pips between your entry price and stop-loss
• Pip Value: The value of a single pip movement in the currency pair you're trading (varies by pair and lot size)

By using this formula, you should be able to quickly assess the situation on the market and make the most out of your forex trades. 

• The FX market allows traders to choose the size of their positions, which are called lots
• There are four different lot sizes in forex - standard, mini, micro, and nano
• Standard lot sizes are typically used in position trading, while mini and micro lots are more effective in day-trading 
• Each lot size has a different pip value. For example, a standard lot has a pip value of $10 
• Traders can calculate lot sizes using their risk tolerance and the pip value of their stop-losses, which can help them find the optimal lot size for a given trade