In forex you don't buy "one euro" — you trade in standardised amounts called lots. The lot size you choose decides how much each price movement is worth in money, which makes it the most important number in your risk management.
The four lot sizes
| Lot type | Volume in platform | Units of base currency | Value of 1 pip on EUR/USD |
|---|---|---|---|
| Standard lot | 1.00 | 100,000 | $10.00 |
| Mini lot | 0.10 | 10,000 | $1.00 |
| Micro lot | 0.01 | 1,000 | $0.10 |
| Nano lot | 0.001 (some brokers only) | 100 | $0.01 |
The $10, $1 and $0.10 pip values apply to pairs where the US dollar is the second (quote) currency, such as EUR/USD, GBP/USD and AUD/USD. For other pairs the pip value changes with the exchange rate — use the pip value calculator to get the exact figure.
What is a pip?
A pip is the standard unit of price movement. For most pairs it is the fourth decimal place (0.0001); for pairs involving the Japanese yen it is the second decimal place (0.01). If EUR/USD moves from 1.0850 to 1.0870, it has moved 20 pips. Many brokers quote an extra decimal — a "pipette" — which is one tenth of a pip.
Turning pips into profit or loss
Profit or loss = pips moved × pip value × number of lots. Some examples on EUR/USD:
- 0.10 lots, price moves 30 pips in your favour: 30 × $10 × 0.10 = +$30.
- 0.01 lots, price moves 50 pips against you: 50 × $10 × 0.01 = −$5.
- 2.00 lots, price moves 15 pips against you: 15 × $10 × 2 = −$300.
The same 15-pip move can cost $1.50 or $300 depending on lot size. That is why professional traders set the lot size from their stop loss and risk limit, not from how confident they feel. The profit/loss calculator runs these numbers for any pair.
How to choose your lot size
A common rule is to risk no more than 1–2% of your account on a single trade. Work backwards:
- Decide the risk in money: $1,000 account × 1% = $10.
- Decide the stop loss from the chart, for example 25 pips.
- Divide: $10 ÷ (25 pips × $10 per pip per lot) = 0.04 lots.
The position size calculator does this instantly, including for non-USD accounts and cross pairs.
Lots and margin
Larger lots need more margin. With 1:100 leverage, one standard lot of EUR/USD at 1.0850 needs about $1,085 of margin; a micro lot needs about $10.85. Leverage changes the margin required, not the pip value — a point many beginners miss. See our leverage and margin guide or the margin calculator.
Lots in bonus terms
Bonus volume requirements are almost always counted in standard lots. Ten trades of 0.10 lots equal one standard lot of volume. Read forex bonus lot requirements explained before accepting an offer.
Cent accounts
Some brokers offer cent accounts where the balance is shown in cents (a $10 deposit shows as 1,000 USC). A "1.00 lot" on a cent account is effectively a micro lot on a standard account. They are useful for practising with very small sums, but check the contract size in the broker's specification before trading.