A lot is a fixed number of currency units. A standard lot is 100,000 units, a mini lot is 10,000, a micro lot is 1,000 and a nano lot is 100. On EUR/USD those are worth roughly $10, $1, $0.10 and $0.01 per pip. Never pick a lot size by feel. Compute it from the money you will risk and your stop distance.
What a lot is
Currencies trade in standardised bundles called lots. Instead of buying 37,500 euros, you trade a number of lots and your platform converts that into units. A lot is a unit-count label, nothing more.
Lot size sets how much each pip is worth. Two traders can take the same setup with the same stop, and one risks $5 while the other risks $500.
The four sizes
- Standard lot: 100,000 units, about $10 per pip on EUR/USD.
- Mini lot: 10,000 units, about $1 per pip.
- Micro lot: 1,000 units, about $0.10 per pip.
- Nano lot: 100 units, about $0.01 per pip. Not every broker offers it.
Platforms take lots as decimals of a standard lot: 1.00 is standard, 0.10 is a mini and 0.01 is a micro.
How to size from your risk
You do not choose a lot size and hope. You derive it.
Lot size = account risk in money ÷ (stop distance in pips × pip value per lot).
Work top-down. First decide the money you will lose if you are wrong. A common cap is 1% of the account. Then read the stop distance in pips off your chart. Then solve for the number of lots that makes the two agree. Lot size falls out at the end. You never pick it first.
A worked example
Account: $5,000. Risk per trade: 1%, which is $50. Trade: EUR/USD with a stop 25 pips away.
A mini lot is $1 per pip on EUR/USD, so a 25-pip stop on one mini lot risks $25. You want to risk $50, so you need two mini lots, entered as 0.20. Check: 2 x $1 x 25 pips = $50.
Change any input and the size changes. Widen the stop to 50 pips and the same $50 risk allows only one mini lot. That is why you compute size on every trade, and why a position size calculator is worth keeping open.
Start on micro lots
Micro lots, and nano lots where available, let you trade real money while keeping the stakes small. A 50-pip mistake on a micro lot costs $5, not $500. That is the right price to pay for learning.
The beginner guide recommends micro lots until you have 30 consecutive plan-adherent trades. See our beginner path. The point is proving you can follow a process before you scale it.
Common mistakes
- Choosing lots by conviction. Certainty is a feeling. Risk is arithmetic.
- Fixed lots regardless of stop. Trading 0.10 on every setup means a wide-stop trade risks far more than a tight-stop one. Size to the stop, every time.
- Ignoring the account currency. If your account is not in the quote currency, the pip value shifts and so does the correct lot. Convert first.
Questions
How do I calculate the right lot size?
Divide the money you will risk by the stop distance in pips multiplied by the pip value per lot. For a $50 risk and a 25-pip stop on EUR/USD, that is two mini lots.
Is lot size the same as leverage?
No. Lot size is how many units you trade. Leverage is how much of that position your broker funds. Risk is set by lot size and stop distance, not by leverage.
70–80% of retail investor accounts lose money trading CFDs. This page is education, not advice. All trade examples are constructed composites.
