A lot is the standard unit of measurement for position size in forex. Rather than specifying an exact number of currency units, traders express positions in lots — which represent a fixed number of base currency units. This standardization makes pip values predictable and sizing calculations straightforward.
The Four Lot Types
- Standard lot: 100,000 units. Pip value ≈ $10 on USD-quoted pairs. Typically used on accounts of $25,000+.
- Mini lot: 10,000 units. Pip value ≈ $1. Suitable for accounts of $5,000–$25,000.
- Micro lot: 1,000 units. Pip value ≈ $0.10. Best for accounts under $5,000 or new traders.
- Nano lot: 100 units. Pip value ≈ $0.01. Offered by some brokers for very small accounts or practice.
Lot Size in MetaTrader
In MT4 and MT5, lot size is entered as a decimal. 1.00 = standard lot. 0.10 = mini lot. 0.01 = micro lot. Many brokers allow fractional sizes like 0.03 or 0.27, letting you dial in the exact size the risk formula produces.
How to Calculate Lot Size
Lot size = Dollar risk ÷ (Stop in pips × pip value per mini lot for that pair). If your dollar risk is $150, your stop is 50 pips, and EUR/USD mini lot pip value is $1: lot size = $150 ÷ (50 × $1) = 3 mini lots = 0.30 in MT4 notation.
The Lot Size Calculator does this directly — enter your account, risk %, stop in pips, and pair, and it returns the exact lot size.