What is Lot Size?

The standardised quantity of a forex trade: standard (100,000 units), mini (10,000) or micro (1,000).

A lot is the standardised quantity in which forex is traded. A standard lot is 100,000 units of the base currency, a mini lot is 10,000 units, and a micro lot is 1,000 units. Position sizes are expressed in these lots: buying 0.25 lots of EUR/USD means a position of 25,000 euros. The lot size directly sets how much each pip of movement is worth — roughly $10, $1 and $0.10 per pip for standard, mini and micro lots on USD-quoted pairs.

Choosing lot size is the most important risk decision a trader makes on every trade, and it should never be guessed. The professional method works backwards: decide the money you are willing to lose (a fixed percentage of the account), measure the stop loss distance in pips, and divide to get the lot size. Two traders can take the identical setup and get completely different outcomes purely because one sized correctly and the other did not.