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What is Lot Size in Forex?
In forex, lot size simply means how many units of a currency you’re buying or selling in a trade.
Think of it like buying things in bulk. If you go to the store and buy 1 bag of rice, or 10 bags, you’re buying different amounts. In forex, we do the same, just with currencies.
Lot size helps you match your trade to your account size, risk tolerance, and strategy. The larger your lot size, the more units you’re trading, and the more money you can potentially make if the price moves in your favor. However, this also means you’ll lose more if the trade goes against you.
That’s why it’s important to choose a lot size that matches your account size and risk tolerance. The key is to trade what you can afford, so you stay in control of both your profits and your losses.
Bigger lot = more money per pip, more risk
Smaller lot = less money per pip, less risk
A pip is the smallest change in price that a currency pair can make. Per pip means how much money you make or lose for every 1 pip the price moves in your trade.
Disclaimer: The pip values shown in the lot size calculations below are based on some major forex pairs. They do not apply to ALL financial instruments, such as commodities, indices, exotic currency pairs, etc. Always check the pip value for the specific instrument you’re trading.
Types of Lot Sizes in Forex
There are four common lot types in forex trading, based on size: standard lot, mini lot, micro lot, and nano lot.
Standard Lot
The standard lot (100,000 units) is the base reference for all lot sizes in forex. If you’re trading 1 standard lot, each pip is worth $10 (on most major pairs).
Example:
If your trade is earning $10 per pip, and the price moves up by 10 pips, you make: 10 pips × $10 = $100 profit
If it moves down 10 pips, you lose: 10 pips × $10 = $100 loss
A standard lot = 100,000 units of currency.
Lot Size Is Typically Written as a Decimal
Lot size is typically written as a decimal number. The decimal tells you what fraction (percentage) of a standard lot (100,000 units) or how many standard lots you’re trading.
Converting Percentage to Decimal
To convert a percentage to a decimal, you divide by 100.
| Percentage (Lot Size) | Decimal (Lot Size) |
| 1% ÷ 100 | 0.01 |
| 5% ÷ 100 | 0.05 |
| 10% ÷ 100 | 0.10 |
| 100% ÷ 100 | 1.00 |
A decimal is a number that uses a dot (.) and is another way of writing fractions. In forex, lot sizes are typically written as decimals to show what fraction of a standard lot you’re trading. Example: 1.00 means a whole (100%), 0.5 means half (50% of a whole), and 0.25 means a quarter (25% of a whole).
You can trade more than one standard lot, and your lot size is usually shown as a decimal on most platforms. However, some brokers may ask you to enter the exact number of units instead. Either way, you’re still choosing how many standard lots or fractions of a standard lot you want to trade, just in different formats depending on the broker.
Example:
- Instead of entering 1.00, you’d enter 100,000 units for 1 standard lot
- Instead of entering 2.00, you’d enter 200,000 units for 2 standard lots
- Instead of entering 3.50, you’d enter 350,000 units for 3 and a half standard lots.
The bigger the lot, the more money you can gain, or lose, with every pip movement.
Unit-based format gives you direct control over how many currency units you’re trading because you’re not picking a percentage or decimal, you’re choosing the exact amount of currency you want to buy or sell. Decimal format is common and easier for many traders to understand. Most brokers and platforms like MetaTrader 4 (MT4) and MetaTrader 5 (MT5) use decimal. Both methods do the same thing, it just depends on your broker’s platform and style.
Smaller Lot Sizes Are Just Percentages of a Standard Lot
As mentioned, you don’t have to trade the full standard lot (100,000 units). You can trade fractions of it, using decimal values that reflect percentages.
| Lot Type | % of Standard Lot | Lot Size (Decimal) | Units of Currency | Value per Pip (USD) |
|---|---|---|---|---|
| Standard Lot | 100% | 1.00 | 100,000 units | $10.00 per pip |
| Mini Lot | 10% | 0.1 | 10,000 units | $1.00 per pip |
| Micro Lot | 1% | 0.01 | 1,000 units | $0.10 per pip |
| Nano Lot | 0.1% | 0.001 | 100 units | $0.01 per pip |
1. Standard Lot
A standard lot is 100% of itself.
So in decimal form: Standard lot = 1.00 lot
Which equals: 1.00 × 100,000 units = 100,000 units
And the pip value is: $10.00 per pip
Used by experienced traders or large accounts.
2. Mini Lot
A mini lot is 10% of a standard lot.
So in decimal form: Mini lot = 0.10 lot
Which equals: 0.10 × 100,000 units = 10,000 units
And the pip value is: $1.00 per pip
Good for intermediate traders.
3. Micro Lot
A micro lot is 1% of a standard lot.
So in decimal form: Micro lot = 0.01 lot
Which equals: 0.01 × 100,000 units = 1,000 units
And the pip value is: $0.10 per pip
Great for beginners or small accounts.
4. Nano Lot
A nano lot is 0.1% of a standard lot.
So in decimal form: Nano lot = 0.001 lot
Which equals: 0.001 × 100,000 units = 100 units
And the pip value is: $0.01 per pip
Disclaimer: The pip values shown in the lot size calculations are based on some major forex pairs. They do not apply to all financial instruments, such as commodities, indices, exotic currency pairs, etc. Always check the pip value for the specific instrument you’re trading.
Forex Lot Size Table from 1% to 100%
| % of Standard Lot | Decimal Lot Size | Units of Currency | Pip Value (USD) |
|---|---|---|---|
| 1% | 0.01 | 1,000 | $0.10 |
| 2% | 0.02 | 2,000 | $0.20 |
| 3% | 0.03 | 3,000 | $0.30 |
| 4% | 0.04 | 4,000 | $0.40 |
| 5% | 0.05 | 5,000 | $0.50 |
| 10% | 0.10 | 10,000 | $1.00 |
| 15% | 0.15 | 15000 | $1.50 |
| 20% | 0.20 | 20,000 | $2.00 |
| 25% | 0.25 | 25,000 | $2.50 |
| 30% | 0.30 | 30,000 | $3.00 |
| 40% | 0.40 | 40,000 | $4.00 |
| 50% | 0.50 | 50,000 | $5.00 |
| 60% | 0.60 | 60,000 | $6.00 |
| 70% | 0.70 | 70,000 | $7.00 |
| 75% | 0.75 | 75,000 | $7.50 |
| 80% | 0.80 | 80,000 | $8.00 |
| 90% | 0.90 | 90,000 | $9.00 |
| 100% | 1.00 | 100,000 | $10.00 |
Summary of Lot Size
Lot size means how many units of a currency you want to buy or sell in a trade; it controls how big or small your trade is. Smaller lot size equals less risk and less profit/loss. A bigger lot size equals more risk and more profit/loss. The standard lot (100,000 units) is the base that all other lot sizes are built from.
Since a standard lot is worth $10 per pip and equals 100,000 units, when you trade a smaller lot size, you’re simply trading a smaller fraction (or percentage) of that full amount.
In forex, lot size is always written as a decimal number. The decimal shows what percentage of a standard lot you’re trading or how many standard lots you’re trading
Example:
1% = 0.01 lot
10% = 0.10 lot
100% = 1.00 lot
So when you choose a lot size, you’re really choosing what fraction of a standard lot (100,000 units) or how many standard lots you want to trade.
If you want to trade less than a standard lot, ask yourself what percentage of a standard lot you want to trade, then convert that percentage into a decimal, and that’s your lot size.
Example:
You want to trade 30% → 30 ÷ 100 = 0.30 lot
You Buy What You Can Afford
In forex trading, you can choose a lot size based on how much money you’re comfortable risking.
- Start small if you have a smaller account
- Increase your lot size as you grow and gain confidence
- Always pick a lot size that fits your budget and risk tolerance
If you don’t have enough money to trade a full standard lot (100,000 units), you can trade smaller lots (mini, micro, or nano lots), which are just fractions of a standard lot. This way, you only trade what you can afford, managing your risk better while still participating in the market.
If you can’t afford to buy a whole bag of rice (standard lot), you can buy smaller portions instead, like half a bag or just a few pounds.
