Lot
Trading BasicsThe standard unit of trade size in forex. One standard lot equals 100,000 units of the base currency.
What Is a Lot in Forex?
A lot is the standardized unit of trade size in the forex market. One standard lot represents 100,000 units of the Base Currency. When you buy one lot of EUR/USD, you are buying 100,000 euros. Lots exist because currencies move in very small increments (Pips), so you need large position sizes for meaningful profit or loss.
Lot Sizes Available
Most brokers offer four lot sizes:
- Standard lot: 100,000 units. One pip equals roughly $10 on EUR/USD.
- Mini Lot: 10,000 units. One pip equals roughly $1.
- Micro Lot: 1,000 units. One pip equals roughly $0.10.
- Nano Lot: 100 units. One pip equals roughly $0.01.
Choosing the Right Lot Size
Your lot size should match your account size and risk tolerance. A common rule is to risk no more than 1-2% of your account on a single trade. With a $1,000 account and a 30-pip Stop-Loss, a micro lot (risking $3) keeps you within the 1% rule. Use our Position Size Calculator to determine the correct lot size for any trade setup.
Related Terms
Mini Lot
A trade size of 10,000 units of the base currency, equal to one-tenth of a standard lot. One pip equals roughly $1 on EUR/USD.
Micro Lot
A trade size of 1,000 units of the base currency, equal to one-hundredth of a standard lot. One pip equals roughly $0.10 on EUR/USD.
Nano Lot
A trade size of 100 units of the base currency, the smallest available lot size. One pip equals roughly $0.01 on EUR/USD.
Position Sizing
The process of determining how many lots or units to trade based on your account size, risk tolerance, and stop-loss distance. Proper position sizing ensures no single trade can cause catastrophic damage to your account.
Contract Size
The number of units of the base currency in one standard lot. For forex, one standard lot is always 100,000 units of the base currency.