Position size in forex is measured in lots. One standard lot is 100,000 units of the base currency; a mini lot is 10,000; a micro lot is 1,000. Most modern platforms let you trade fractions, like 0.37 lots.
What each size costs per pip
For USD-quoted pairs, remember three numbers: standard ≈ $10 per pip, mini ≈ $1, micro ≈ $0.10. A 30-pip stop therefore risks roughly $300, $30, or $3 respectively. This is why micro lots exist: they let small accounts take real trades with survivable risk.
Choosing your size — backwards
The correct lot size is an output, not an input. Formula: risk amount ÷ (stop distance in pips × pip value per lot). Example: $500 account, 1% risk = $5; stop 25 pips; $5 ÷ (25 × $10) = 0.02 lots. The number feels tiny — and it is exactly why that account survives to grow.
Common mistakes
- Trading one mini lot on a $100 account "because the profit is too small otherwise" — that's 10× proper risk.
- Keeping the same lot size as stop distances vary — your dollar risk then swings wildly trade to trade.
- Increasing size after losses to recover faster — the classic path to a margin call, covered in Revenge Trading.
Size like an actuary, and the market's randomness becomes something you outlast rather than something that outlasts you.
Education only — not financial advice. Trading carries risk of loss; never trade money you cannot afford to lose.
