A lot is the unit you use to set the size of a forex or gold trade. Getting lot sizes right is the difference between a loss you barely notice and one that damages your account. This guide explains standard, mini, micro and nano lots, what each one is worth per pip, and how to choose the right size.
The four lot sizes
| Lot type | Lots in MT4/MT5 | Units of base currency | Pip value on EUR/USD (USD account) |
|---|---|---|---|
| Standard | 1.00 | 100,000 | $10.00 |
| Mini | 0.10 | 10,000 | $1.00 |
| Micro | 0.01 | 1,000 | $0.10 |
| Nano | 0.001 (some brokers only) | 100 | $0.01 |
For pairs where the US dollar is the second (quote) currency, such as EUR/USD, GBP/USD and AUD/USD, a pip on one standard lot is always $10. For other pairs the pip value changes with the exchange rate.
How pip value is calculated
Pip value (in the quote currency) = Pip size × Units. Then convert that amount into your account currency at the current exchange rate.
- EUR/USD, 1 standard lot: 0.0001 × 100,000 = $10 per pip.
- USD/JPY, 1 standard lot: 0.01 × 100,000 = ¥1,000 per pip. At a rate of 150.00 that is about $6.67.
- USD/CAD, 1 standard lot: 0.0001 × 100,000 = C$10 per pip. At 1.3500 that is about $7.41.
Gold is different
On XAU/USD, one standard lot is usually 100 ounces, so every $1.00 move in gold is $100 per lot, 0.10 lots is $10 per $1 move and 0.01 lots is $1 per $1 move. Gold routinely moves $20–$40 or more in a day, so lot sizes that feel small on EUR/USD can be large on gold. Always check your broker’s contract specification. Our gold position size guide has worked examples.
How to choose a lot size
Do not choose a lot size first. Choose your risk and stop, then let the lot size fall out of the calculation:
- Decide the risk per trade, for example 1% of a $2,000 account = $20.
- Place your stop where the trade idea is proven wrong, for example 25 pips on EUR/USD.
- Risk per standard lot = 25 pips × $10 = $250.
- Lots = $20 ÷ $250 = 0.08 lots (8 micro lots).
Lot size and leverage are not the same thing
Leverage decides how much margin your broker holds for a position; lot size decides how much you make or lose per pip. With 1:100 leverage, 1 standard lot of EUR/USD at 1.1000 needs about $1,100 of margin, but a 50-pip move still costs $500. High leverage lets you open bigger positions; it does not make them safer. See how leverage works.
Common mistakes
- Using the same lot size for every trade regardless of stop distance.
- Assuming gold lots behave like EUR/USD lots.
- Forgetting that pip values change for non-USD-quoted pairs.
- Starting live trading with standard lots instead of micro lots.
Frequently asked questions
What is 0.01 lot in forex?
A micro lot: 1,000 units of the base currency, worth about $0.10 per pip on EUR/USD.
What lot size should a beginner use?
Micro lots (0.01) are the usual starting point, sized so that each trade risks around 0.5–1% of the account.
How much is 1 lot of gold?
Usually 100 ounces; a $1 move is worth $100 per lot.
Do all brokers offer nano lots?
No. Most MT4/MT5 brokers have a minimum of 0.01 lots; some cent accounts effectively offer smaller sizes.
Trading forex and gold carries a high level of risk. See our risk disclaimer.
