What is a lot in forex?
A lot is the unit used to measure the size of a forex trade. One standard lot is 100,000 units of the base currency, a mini lot is 10,000 units and a micro lot is 1,000 units. So buying one standard lot of EUR/USD means buying 100,000 euros against the US dollar. Lot size, together with how many pips price moves, determines how much you make or lose on a trade.
Lots exist because currency prices move in very small increments. A one-pip move on a single euro is worth a fraction of a cent, so trades are placed in large blocks of currency to make those moves meaningful. Most platforms let you trade in steps of 0.01 lots, which is the same as one micro lot.
Forex lot sizes compared
The table below shows the main lot sizes and their pip value on EUR/USD, or any pair quoted in US dollars, for a USD-denominated account.
| Lot type | Units of base currency | Lots on a platform | Pip value on EUR/USD |
|---|---|---|---|
| Standard lot | 100,000 | 1.00 | $10.00 |
| Mini lot | 10,000 | 0.10 | $1.00 |
| Micro lot | 1,000 | 0.01 | $0.10 |
| Nano lot | 100 | 0.001 | $0.01 |
Nano lots are only offered by some brokers and account types, so check your platform's minimum trade size. If pips are new to you, our guide to pips and pip value explains where the $10 figure comes from and how it changes on pairs not quoted in your account currency.
How lot sizes appear on your platform
Platforms such as MetaTrader express size as decimal lots. An order of 0.35 lots is 35,000 units, which you can think of as three mini lots and five micro lots. An order of 2.00 lots is 200,000 units. Some brokers instead ask you to enter the number of units directly, for example 35,000. The underlying position is the same either way.
Lot size and notional value
The number of units tells you how much currency you control. The notional value is that amount expressed in the quote currency at the current price.
For example, one standard lot of EUR/USD at 1.1000 is 100,000 euros, which has a notional value of 100,000 x 1.1000 = $110,000. A micro lot at the same price is 1,000 euros, or $1,100 notional.
You do not need $110,000 to open a standard lot because forex is traded on margin. Your broker holds a fraction of the notional value as a deposit. At 30:1 leverage, the cap for retail traders on major pairs in the UK, EU and Australia, the margin on that standard lot would be $110,000 / 30 = about $3,667. Our guide to leverage and margin covers this in detail, and you can run the numbers with the margin calculator.
How lot size affects profit and loss
Lot size scales every pip. The same price move produces very different results depending on how big the position is.
Say EUR/USD moves 30 pips in your favour:
- 1 standard lot: 30 x $10 = $300
- 1 mini lot: 30 x $1 = $30
- 1 micro lot: 30 x $0.10 = $3
The same is true when price moves against you. A 30-pip loss on one standard lot is $300, which may be a small fraction of a large account but a serious hit to a $2,000 account. The market does not care what lot size you chose, so the size needs to fit your account and your stop-loss, not the profit you hope for.
How to choose the right lot size
The most reliable way to pick a lot size is to work backwards from risk. Decide how much of your account you are willing to lose if your stop-loss is hit, then size the trade so the stop distance equals that amount.
Lot size = (account balance x risk %) / (stop-loss in pips x pip value per standard lot)
Worked example
You have a $5,000 account and risk 1% per trade. You want to buy EUR/USD with a 25-pip stop-loss.
- Money at risk: $5,000 x 1% = $50
- Required pip value: $50 / 25 pips = $2 per pip
- Lot size: $2 / $10 per standard lot = 0.20 lots
So the trade is 0.20 lots, or 20,000 units. If the stop is hit, you lose 25 pips x $2 = $50, exactly 1% of the account, before spread and commission.
Now widen the stop to 50 pips with the same $50 risk. The pip value has to halve to $1, so the lot size drops to 0.10. A wider stop means a smaller position, and a tighter stop allows a larger one. The dollar risk stays fixed either way. The position size calculator does this for any pair, and our position sizing lesson goes further into risk across several open trades.
When the quote currency is not USD
For pairs like USD/JPY or EUR/GBP, the pip value per standard lot is not $10 for a USD account, so plug in the correct pip value for the pair at the current exchange rate. Getting this wrong is one of the main reasons beginners end up risking more than they planned on cross pairs.
Lot size tips for beginners
- Start with micro lots. At $0.10 per pip on EUR/USD, you can learn how live trading feels without large swings in your balance.
- Size from your stop, not your target. Choose the stop based on the chart, then calculate the lot size.
- Do not add size to "make back" losses. Increasing lot size after a loss is a common route to a much bigger loss.
- Remember the costs. Spread and commission scale with lot size, so a larger position also costs more to open. See what spread means in forex.
- Check contract sizes on other assets. A "lot" of gold, an index or a crypto CFD is defined differently by each broker. Always read the contract specification before trading.
Trading forex on margin involves substantial risk of loss, and you can lose more than you expect if position sizes are too large for your account. This guide is educational and not financial advice. Please read our risk disclaimer.