Module 2: Trading Fundamentals
Lot Sizes
5 min read
Lots measure trade size. Choosing the right size is the core of risk control.
Standard, mini and micro
A standard lot is 100,000 units of the base currency. A mini lot is 10,000 units (0.1 lot) and a micro lot is 1,000 units (0.01 lot). Some brokers offer smaller sizes on certain accounts.
Why size matters
Doubling your lot size doubles both potential profit and potential loss. Position sizing should be based on how much you are willing to lose if your stop-loss is hit, not on how much you hope to make.
Example: Pip value by lot
On EUR/USD in a USD account: 1 lot ≈ $10 per pip, 0.1 lot ≈ $1 per pip, 0.01 lot ≈ $0.10 per pip.
Key takeaways
- 1 standard lot = 100,000 units.
- Smaller lots allow precise risk control.
- Size positions from risk, not from profit targets.
Educational content only, not financial advice. Trading forex and CFDs involves significant risk of loss.