Lot
A lot is the standard position size in forex: 100,000 units for a standard lot, 10,000 mini, 1,000 micro.
A lot is a standard forex position size: 100,000 units standard, 10,000 mini, 1,000 micro. Pip value scales with lot size, about $10 per pip on a standard lot.
A lot is a standardized position size in forex. A standard lot is 100,000 units of the base currency, a mini lot is 10,000, and a micro lot is 1,000. Brokers also offer fractional lots, letting traders size precisely. Every position-sizing calculation starts with the lot: pip value scales directly with lot size, and a standard lot's $10 per pip becomes $1 or $0.10 on smaller lots.
How It Works
- Standard lot = 100,000 base currency units
- Mini = 10,000, micro = 1,000
- Fractional lots allow precise sizing between these
Trading Tips
Never think in lots first - think in risk, then convert to lots
Leverage makes a standard lot affordable and dangerous in the same trade
Pip value per lot varies by pair and account currency
Lot Example
Say your account holds $1,000 and you risk 1% per trade, $10. With a 20-pip stop on EUR/USD at roughly $10 per pip per standard lot, you can afford $0.50 per pip, which is 0.05 lots, or five micro lots.
How Traders Use Lot
Work backwards from risk, never forwards from lots. Decide the dollars first, divide by the stop distance, and let the answer pick the lot size. New accounts should live in micro lots until the process holds for months.
Related Terms
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