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This tool is for education and planning only and is not financial advice. Forex and CFD trading carries a high risk of losing money rapidly due to leverage. Check your broker's own contract specifications, fees and margin rules before you trade.
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Lot sizes
From our lesson "Pips, Lots and Leverage" (Forex basics, part 2). This part starts at 0:38 of the 2:39 video and plays in a large player.
What is a lot size?
A lot is the unit you trade in. Brokers let you trade fractions of a standard lot, usually down to 0.01.
| Lot | Units | Pip value on EUR/USD |
|---|---|---|
| Standard (1.00) | 100,000 | $10 |
| Mini (0.10) | 10,000 | $1 |
| Micro (0.01) | 1,000 | $0.10 |
How the lot size is worked out
- Decide the money at risk
Balance × risk %. On $5,000 at 1%, that is $50.
- Measure the stop in pips
The distance from entry to stop-loss, for example 25 pips.
- Find the pip value per lot
$10 for pairs quoted in USD; see the pip calculator for others.
- Divide and round down
Lots = $50 ÷ (25 × $10) = 0.20 lots. Always round down to the broker's step.
The 1% rule
Many traders risk no more than 1% of the account on a single trade. It is a habit, not a law, but the maths shows why it helps.
Losing streaks happen
Ten losses in a row at 1% leaves about 90% of the account. At 5% it leaves about 60%.
Smaller swings, clearer thinking
Small, fixed losses make it easier to follow your plan after a bad day.
The stop sets the size
A wider stop means fewer lots for the same risk, not more risk.
Fixed lots vs calculated lots
Fixed lots
Trading 0.5 lots every time means a 20-pip stop risks $100 but a 60-pip stop risks $300. Risk changes with every trade.
Calculated lots
Sizing from the stop keeps the risk the same, $50 for example, whatever the stop distance.
Lot size mistakes
0.237 lots should be 0.23, not 0.24; rounding up adds risk you did not plan.
Yen and cross pairs have different pip values.
A wider stop on the same lots increases the loss.
Recalculate from the real balance, not a target.
Lot Size Calculator FAQs
What is a lot size in forex?
It is the size of a trade in units. A standard lot is 100,000 units of the base currency, a mini lot 10,000 and a micro lot 1,000.
How do I calculate forex lot size?
Divide the money you are willing to lose by your stop-loss in pips times the pip value per lot. $50 ÷ (25 pips × $10) = 0.2 lots.
What is the 1% risk rule in forex?
Risking no more than 1% of your account on a single trade, so a run of losses leaves most of the account intact.
What is the difference between a fixed lot and a calculated lot size?
A fixed lot uses the same size every time, so the money at risk changes with the stop. A calculated lot keeps the money at risk the same.
What pip value should I use for EUR/USD?
$10 per standard lot, $1 per mini lot and $0.10 per micro lot in a USD account.
How much should I risk per trade in forex?
Many traders use 0.5% to 2%. Beginners often start at 1% or less while they learn.
How does a forex lot size calculator protect my trading account?
It keeps every loss at the amount you chose in advance, so one bad trade or a losing streak cannot do outsized damage.