"Lot" is the unit of position size in forex. Get this wrong and every other risk concept fails.
The four lot sizes
- Standard lot (1.0): 100,000 units of the base currency.
- Mini lot (0.1): 10,000 units.
- Micro lot (0.01): 1,000 units.
- Nano lot: 100 units. Available at fewer brokers.
What that means in dollars
On EUR/USD, a 1-pip move on:
- 1 standard lot ≈ $10 per pip
- 1 mini lot ≈ $1 per pip
- 1 micro lot ≈ $0.10 per pip
JPY pairs differ — pip is the second decimal, not the fourth. Use the pip value calculator to confirm.
How lot size connects to risk
Risk in dollars = lot size × pip value × stop distance in pips. Solve for lot size: lot = risk_$ / (pip_value × stop_pips). Always.
Common mistakes
- Trading "1 lot" because it sounds standard. On a $1,000 account, that is wild leverage on most pairs.
- Mixing forex and gold lot conventions. XAUUSD lot sizing is different — see the XAUUSD guide.
- Adding lots after a winning trade without recomputing risk. Risk is per-trade, not per-streak.
Next steps on ShaFX
- Free trading calculators — position size, pip value, margin, risk/reward, drawdown.
- Take a quiz on this topic and see what you missed.
- Glossary — precise definitions for every term used here.
- Compare brokers using our methodology.
Educational only. This article is general information for trader education. It is not financial advice, tax advice, legal advice, or a recommendation to trade. Trading CFDs and forex is high-risk and most retail investor accounts lose money. Read the Risk Disclosure.