A lot is the size of your forex trade. One standard lot is 100,000 units of the first currency in the pair.
The three lot sizes
| Name | On the platform | Units | Pip value on EUR/USD |
|---|---|---|---|
| Standard | 1.00 | 100,000 | about 10 dollars |
| Mini | 0.10 | 10,000 | about 1 dollar |
| Micro | 0.01 | 1,000 | about 0.10 dollar |
Platforms show lots as decimals. A signal that says “0.10” means one mini lot. Some brokers offer cent accounts for even smaller trades.
Why it matters
The chart decides how many pips your stop is. You decide the lot. The lot turns pips into money.
Say your stop is 25 pips away on GBP/USD.
- On 0.01 lot you risk about 2.50 dollars.
- On 0.10 lot you risk about 25 dollars.
- On 1.00 lot you risk about 250 dollars.
Same trade. Same stop. Very different pain if it fails.
How to pick a lot size
Work backwards from the loss you can accept.
- Pick your risk in money. A common rule is 1 percent of the account.
- Measure the stop in pips.
- Divide risk by stop. That gives you dollars per pip.
- Turn that into lots. Round down.
Lot size = risk in money ÷ (stop in pips × pip value of one lot). Round down, never up.
A position size calculator does this in seconds. Do it by hand a few times first so it sticks.
Example
- Account: 1,000 dollars.
- Risk: 1 percent, so 10 dollars.
- Signal: Buy
EUR/USD. Stop is 50 pips away. - 10 dollars ÷ 50 pips = 0.20 dollars per pip.
- A micro lot is 0.10 dollars per pip. So you take 0.02 lot.
- If the stop hits, you lose 10 dollars. That is 1 percent.
Say you took 0.20 lot because the signal “looked strong”. The same stop would cost 100 dollars. That is 10 percent of the account in one trade.
Mistakes to avoid
- Using the same lot on every trade, no matter the stop.
- Making the lot bigger after a loss to win it back.
- Copying the lot size in a signal. It was not sized for your account.
- Forgetting that pip value is different on yen pairs and gold.
- Opening several trades on similar pairs. That is really one big lot.
Keep lots small. Size them from the stop. Next, read how much money you need to start forex.
Questions, answered plainly.
How many units are in one lot?
A standard lot is 100,000 units, a mini lot is 10,000 and a micro lot is 1,000.
What lot size should a beginner use?
Micro lots, 0.01 to 0.05, sized so the loss at your stop is about 1 percent of the account.
Does lot size change the spread?
No, the spread in pips stays the same, but it costs more money on a bigger lot.