A micro lot is 1/10th of a mini lot and 1/100th of a regular lot. Conversely one mini lot equals 10 micro lots and 100 micro lots equals 1 regular lot. Trading 1 micro lot is the smallest amount of real money that most forex brokers will allow you to trade.
Progression of Your Forex Trading
You should begin your forex micro lot trading program only after successfully demo trading. Successful demo trading might be some level of consistency like 3 to 1 win/loss ratio or some other criteria. You would demo trade first to test the effectiveness of the trading system you have chosen. If you find an effective system and can successfully trade that system in a demo environment, you are ready to start micro lot trading. If you cannot prove in a demo account that your trading system works, you must first find a trading system that works for you and produce profitable demo trades before moving on to micro lot trading.
At the point you begin micro lot trading you still have not risked any real money. We believe that almost all forex traders should demo trade their system first, then, if successful, move up to micro lot trading. Demo trading gets you familiar with your brokerage platform and setting orders and stops as well as validating the effectiveness of your trading system out.