Lots in forex: sizes, the broker settings that override you, and how to choose
One standard lot is 100,000 units. The four sizes, the three broker settings that change what a lot means, why rounding matters most on small accounts, and the order to size a position in.
A lot is the unit position size is expressed in. One standard lot is 100,000 units of the base currency. When you open 1.00 lot of EUR/USD you are trading 100,000 euros, whether or not you have 100,000 euros, because of leverage.
The four sizes
| Name | Written as | Units | Pip value on EUR/USD, dollar account |
|---|---|---|---|
| Standard lot | 1.00 | 100,000 | $10.00 |
| Mini lot | 0.10 | 10,000 | $1.00 |
| Micro lot | 0.01 | 1,000 | $0.10 |
| Nano lot | 0.001 | 100 | $0.01 |
Most retail brokers accept a minimum of 0.01. Nano lots exist on a minority of accounts, usually labelled cent accounts, where the balance is also displayed in cents.
The number you type is not always what you get
Three broker settings change what a lot size means or whether the order is accepted at all. All three are in the symbol specification, which you can open in the platform by right-clicking the symbol.
- Minimum volume. Usually 0.01. Below it the order is rejected.
- Volume step. Usually 0.01. If you calculate a position of 0.037 lots, you cannot trade it. You round, and you round down, because rounding up increases risk beyond what you decided.
- Contract size. 100,000 for most currency pairs, but not a law. On gold it is often 100 ounces. On indices and crypto it varies widely. A “1.00 lot” of gold and a “1.00 lot” of EUR/USD are completely different amounts of money at risk.
That last point catches people moving from currencies to gold. The lot number looks familiar and the exposure is not.
Why the rounding matters more than it looks
Take a $500 account risking 1%, which is $5, with a 40 pip stop on EUR/USD. The arithmetic gives $5 รท 40 = $0.125 per pip, which is 0.0125 lots. You cannot trade that. Your options are:
- 0.01 lots: risk becomes $4. You are risking 0.8%, slightly under plan.
- 0.02 lots: risk becomes $8. You are risking 1.6%, over half again more than you decided.
On a small account the step size quietly overrides your risk rule. This is the real reason small accounts are harder to manage: not the size of the profits, but the coarseness of the sizing. It is also why a wider stop on a small account can be safer than a tight one, because it moves you into a range where the rounding costs less.
Lots and margin are different things
A common mix-up. The lot size determines your exposure and therefore your profit and loss per pip. The margin is the deposit your broker freezes to let you hold that exposure, and it depends on your leverage.
1.00 lot of EUR/USD at 1.0850 is $108,500 of exposure regardless of your leverage. At 1:30 leverage the margin required is about $3,617; at 1:500 it is about $217. The risk of the position is identical in both cases. Only the amount of your money that is locked changes, and with it how close you are to a margin call.
Leverage does not change how much you can lose on a trade. Position size does.
How to choose the size, in order
Position size should be the output of a calculation, never a habit. The order is always the same:
- Decide the money you are willing to lose on this trade, as a percentage of the account.
- Find where the stop belongs, from the chart, not from the size you want.
- Measure that distance in pips.
- Divide the money by the pips to get the value per pip you can afford.
- Convert that to lots and round down to the volume step.
Doing it in this order means the stop is placed where the trade is actually invalidated, and the size adapts. Doing it in reverse, picking a size first and then placing the stop where it fits, is how accounts break. The position size calculator runs steps 3 to 5.
Worked examples
| Account | Risk | Stop | Pair | Size | Actual risk |
|---|---|---|---|---|---|
| $1,000 | 1% = $10 | 20 pips | EUR/USD | 0.05 lots | $10.00 |
| $1,000 | 1% = $10 | 60 pips | EUR/USD | 0.01 lots | $6.00 |
| $5,000 | 0.5% = $25 | 35 pips | EUR/USD | 0.07 lots | $24.50 |
| $5,000 | 1% = $50 | 40 pips | USD/JPY | 0.18 lots | about $48.70 |
The yen row is approximate on purpose: pip value on yen pairs moves with the exchange rate, as explained in pips.
What to read next
- Pips: the unit the stop distance is measured in.
- Margin: what the broker freezes, and when it calls.
- Risk management: choosing the percentage in step 1.
- Lot size calculator.
Frequently asked questions
What is the smallest position I can trade?
On most retail brokers, 0.01 lots, which is 1,000 units. A minority of accounts, usually labelled cent accounts, allow 0.001. The exact minimum and the step between sizes are in the symbol specification in your platform.
Is one lot of gold the same as one lot of EUR/USD?
No. Contract size is 100,000 units for most currency pairs, but on gold it is often 100 ounces, and on indices and crypto it varies widely. The lot number looks familiar and the exposure is completely different, which catches people moving from currencies to gold.
Should I round my position size up or down?
Down. If the calculation gives 0.037 lots and your step is 0.01, trade 0.03. Rounding up increases your risk beyond the amount you decided, and on a small account that difference can be large in percentage terms.
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