What is a lot in forex?
A lot is the unit used to set the size of a forex trade. One standard lot is 100,000 units of the base currency, a mini lot is 10,000 and a micro lot is 1,000. On EUR/USD that makes each pip worth $10, $1 and $0.10. Other instruments, such as gold, use their own contract size.
When you open a trade in MetaTrader, the platform asks for a volume such as 0.10 or 1.00. That number is in lots, and it sets how much each pip is worth to you.
What does a lot mean?
A lot is a standard batch of the base currency. One standard lot is 100,000 units. Buying 1.00 lot of EUR/USD means buying 100,000 euros and paying for them in dollars.
Few retail traders start at that size. Platforms let you trade fractions of a lot, usually down to 0.01.
Standard, mini and micro lots
The common sizes have names, and each one is a tenth of the size above it.
| Name | Volume in MetaTrader | Units of base currency | Pip value on EUR/USD |
|---|---|---|---|
| Standard lot | 1.00 | 100,000 | $10.00 |
| Mini lot | 0.10 | 10,000 | $1.00 |
| Micro lot | 0.01 | 1,000 | $0.10 |
Some brokers offer even smaller sizes, often called nano lots, on special account types. The volume box still reads in lots, so check what 0.01 means on your account.
The pip values in the table hold for any pair quoted in US dollars, such as GBP/USD or AUD/USD, in a dollar account. For other pairs the value is converted, as shown in what a pip is.
One lot is not always 100,000 units
The 100,000 rule is for currency pairs. Other instruments define a lot by their own contract size, which the broker sets.
On most MT4 and MT5 accounts, one lot of gold (XAU/USD) is 100 troy ounces. This site's calculators use 5,000 ounces for one lot of silver. Indices, oil and crypto vary widely from broker to broker.
That changes the numbers a lot. With gold at an illustrative $4,000 an ounce:
- 1.00 lot is 100 ounces, a position worth 100 × $4,000 = $400,000.
- 0.01 lot is 1 ounce, worth $4,000.
- A $1 move in gold changes the result by $100 on 1.00 lot and by $1 on 0.01 lot.
Open the contract specification before you trade a symbol for the first time. In MetaTrader, right-click the symbol in Market Watch and choose Specification.
What is your position really worth?
The full value of a position, its notional value, is units multiplied by price. With EUR/USD at an illustrative 1.10000:
- 1.00 lot is 100,000 × 1.10000 = $110,000.
- 0.10 lot is $11,000.
- 0.01 lot is $1,100.
These sums are far bigger than most trading accounts. Brokers only ask you to put up a deposit called margin, and the leverage lesson explains how that works and what it does to your risk.
How to choose a lot size from your risk
Pick the lot size last, not first. Decide how much money you are prepared to lose on the trade and where your stop loss belongs, then let those two numbers set the size.
Lots = money at risk ÷ (stop distance in pips × pip value per lot)
A worked example on EUR/USD:
- Your account holds $2,000 and you risk 1% on this trade, which is $20.
- Your stop loss sits 25 pips from your entry.
- One lot of EUR/USD is worth $10 per pip.
- Lots = $20 ÷ (25 × $10) = 0.08 lot.
To check: 0.08 lot is worth $0.80 per pip, and 25 pips × $0.80 = $20.
A wider stop simply means a smaller trade. With the same $20 at risk and a 50 pip stop, the size halves: $20 ÷ (50 × $10) = 0.04 lot.
The method works for gold too. With $5,000 and 1% risk you can lose $50. A stop $5.00 away is 500 pips at $1 per pip per lot, so $50 ÷ (500 × $1) = 0.10 lot, which is 10 ounces.
When the answer falls between two steps, round down. Rounding up means risking more than you planned. The lot size calculator does the sum and rounds down for you.
If the answer comes out below 0.01 lot, even the smallest trade risks more than your plan allows. Skip that trade, or look for a setup with a closer stop.
Lot size and trading costs
Costs grow with size. A 0.8 pip spread costs $8 on 1.00 lot of EUR/USD and $0.80 on 0.10 lot. Raw spread accounts also charge a commission per lot.
Rebates are counted per lot as well. When your account sits under an introducing broker that passes back part of its commission, each lot you trade returns a set amount. That is the idea behind a forex rebate.
Questions
How much is 0.01 lot?
On a currency pair, 0.01 lot is 1,000 units of the base currency, and on EUR/USD each pip is then worth $0.10. On gold, 0.01 lot is usually 1 ounce.
What lot size should a beginner use?
Work it out from your risk rather than picking a number. Many beginners start at 0.01 lot, where a pip on EUR/USD is worth $0.10, which keeps early mistakes cheap.
Is 1 lot of gold the same as 1 lot of EUR/USD?
No. One lot of EUR/USD is 100,000 euros, while one lot of gold is usually 100 ounces. Their pip values and margin needs are different, so check the contract specification.
What is the smallest lot size I can trade?
On most MT4 and MT5 accounts the minimum is 0.01 lot, and volume moves in steps of 0.01. Your broker's contract specification shows the exact limits for each symbol.
Keep learning
Chapter 2How does a forex trade make or lose money?A forex trade makes money when the pair moves in your direction by more than the trade costs, and loses when it moves against you. A buy gains as the price rises and a sell gains as it falls. Profit is the price change times trade size, less commission and swap.
Chapter 2When do you buy or sell a currency pair?You buy a currency pair when you expect the first currency, the base, to strengthen against the second, and you sell when you expect it to weaken. If your view is about one currency, find which side of the pair it sits on: a weaker quote currency pushes the pair up, so you buy.
Chapter 2What is a pip in forex?A pip is the standard step traders use to measure price moves. On most currency pairs it is 0.0001, the fourth decimal place, and on pairs quoted in Japanese yen it is 0.01. A pipette is one tenth of a pip. On one standard lot of EUR/USD, each pip is worth $10.
Chapter 2What is the spread in forex?The spread is the gap between the bid price you can sell at and the ask price you can buy at. You pay it on every trade, the moment you open it. On EUR/USD it is often one or two pips or less, and it widens around the daily rollover, the weekly open and big news.
Chapter 2What are the bid and ask prices in forex?Every forex quote has two prices. The bid is the price at which you can sell, and the ask is the higher price at which you can buy. The gap between them is the spread. You buy at the ask and close at the bid, so every new trade starts slightly behind by the size of the spread.
Chapter 2Forex terms you will hear every day.The everyday words of forex describe what a trade is doing and what it costs. Long means you bought, short means you sold. A pip is the standard price step, a lot is the trade size, the spread is the gap between bid and ask, and margin is the deposit your broker holds while a trade is open.
Chapter 2What types of orders can you place in forex?A market order buys or sells straight away at the current price. A pending order waits for a price you choose: a limit order waits for a better price, and a stop order joins a move once price breaks a level. Stop loss and take profit orders close an open trade at prices you set in advance.
Chapter 2Forex order types cheat sheet.A market order fills now at the current price. A limit order waits for a better price: a buy limit below the market, a sell limit above it. A stop order waits for a worse price: a buy stop above, a sell stop below. Buy orders trigger on the ask, sell orders on the bid.
Chapter 2What is a forex demo account, and how should you use it?A forex demo account is a practice account funded with virtual money. You trade on the broker's platform with live or near-live prices, so you can learn orders, stops and margin without risking your own cash. Set it up with the balance and leverage you would really use, and expect live fills and feelings to differ.
Chapter 2Can you get rich trading forex?A few people make large sums trading forex, but the loss figures that EU and UK brokers must publish show that most retail CFD accounts at those brokers lose money. Getting rich would need a large starting balance and years of steady returns. Small accounts chasing big targets usually take risks large enough to wipe them out.
Chapter 2Forex basics cheat sheet: pairs, pips, lots, leverage and margin.This cheat sheet sums up the forex basics chapter on one page. Each idea gets a short summary, its formula and a link to the full lesson. The quick reference tables let you check pip sizes, pip values, contract sizes and margin before you place a trade, and one worked trade ties everything together.
