Lot Size
Also known as: lot, standard lot, mini lot, micro lot, contract size
What is it?
A lot is the standardised unit forex position size is expressed in, and one standard lot is 100,000 units of the pair's base currency. Three sizes cover almost all retail trading. A standard lot is 100,000 units and moves about ten dollars per pip on a dollar-quoted pair, a mini lot is 10,000 units and moves about one dollar per pip, and a micro lot is 1,000 units and moves about ten cents.
| Lot size | Entered as | Units of base currency | Approx. pip value | Cost of a 25-pip stop |
|---|---|---|---|---|
| Standard lot | 1.00 | 100,000 | $10.00 | $250.00 |
| Mini lot | 0.10 | 10,000 | $1.00 | $25.00 |
| Micro lot | 0.01 | 1,000 | $0.10 | $2.50 |
Platforms accept the size as a decimal, so 0.10 lots is a mini and 0.01 lots is a micro. Lot size is the only variable that converts a market distance into money. A 25-pip stop costs 250 dollars at one standard lot, 25 dollars at one mini and 2.50 at one micro, while the entry, the stop and the setup are identical in all three.
That is why sizing is decided from risk rather than from conviction: pick the money you are willing to lose, divide it by the stop distance in pips, and the lot size falls out of the arithmetic.
Why it matters: Lot size is what turns a stop distance into an actual money loss, so it is the single setting that decides how much a losing trade costs you.
Lot size = risk in account currency / (stop distance in pips x pip value per lot)
Lot size scales every outcome linearly, so a tenfold sizing error turns a routine losing trade into an account-threatening one without changing the strategy at all.
Real-world example
On a 5,000 dollar account risking 1 percent with a 25-pip stop on EUR/USD, the 50 dollars of risk divided by 25 pips gives 2 dollars per pip, which is 0.20 lots.
How SignalBots handles it
SignalBots publishes each signal's entry and stop as prices, so you can convert the pip distance into the lot size that matches your own risk per trade instead of copying someone else's size. See /risk-warning.
Pro tip
Recalculate lot size for every trade rather than keeping a default. A fixed 0.10 lots risks four times as much on a 40-pip stop as it does on a 10-pip one.
Common pitfalls
Sizing from account balance alone and ignoring the stop distance, so wide-stop setups quietly risk several times more than narrow-stop ones.
Frequently asked questions
Is one lot always 100,000 units?
For forex, yes: one standard lot is 100,000 units of the base currency. Metals, indices and crypto CFDs use their own contract sizes, so check the symbol specification before you size a position.
What does 0.01 lots mean?
One micro lot, or 1,000 units of the base currency. On a dollar-quoted pair that is roughly ten cents per pip, and it is the smallest size most retail brokers accept.
Does a bigger lot size need more margin?
Yes, and proportionally. Margin required is the position's notional value divided by your leverage, so doubling the lot size doubles the margin locked and shrinks the free-margin cushion.
How do I pick a lot size from a signal?
Take the pip distance from entry to stop, decide the money you are willing to lose, and divide. Never copy the size someone else posts, because it was calculated for their account balance, not yours.
Do automated strategies size in lots too?
Most do. An EA or copier usually takes either a fixed lot or a percentage-of-equity rule, and a lot multiplier scales the incoming size. Check which one is active before going live. Your capital is at risk.
Trading involves substantial risk of loss. Historical and backtested results do not guarantee future performance. Read the full risk warning.
