Lot Sizes and Trade Volume — Market Fundamentals

What Is a Lot?

In forex, trade size is measured in lots. A standard lot equals 100,000 units of the base currency. A mini lot equals 10,000 units, and a micro lot equals 1,000 units. These standardized sizes make it easier to calculate position value and risk.

[Read the lesson: Lot Sizes and Trade Volume](/learn-to-trade/market-fundamentals/lot-sizes-and-trade-volume)

Connecting Lot Size to Pip Value

For a pair like EUR/USD where a pip equals 0.0001, one standard lot (100,000 units) makes each pip worth approximately $10 (100,000 × 0.0001). A mini lot makes each pip worth about $1, and a micro lot makes each pip worth about $0.10.

**Calculating Pip Value:** Standard lot: 100,000 × 0.0001 = $10 per pip. Mini lot: 10,000 × 0.0001 = $1 per pip. Micro lot: 1,000 × 0.0001 = $0.10 per pip. If a trade moves 20 pips in your favor on one mini lot, that's a $20 gain.

[Read the lesson: Lot Sizes and Trade Volume](/learn-to-trade/market-fundamentals/lot-sizes-and-trade-volume)

Why Lot Size Matters for Risk

Choosing a larger lot size increases both potential profit and potential loss for the same pip movement. A beginner trading micro lots risks far less per pip than someone trading standard lots, which is why starting small is a common and sensible approach while learning.

[Read the lesson: Lot Sizes and Trade Volume](/learn-to-trade/market-fundamentals/lot-sizes-and-trade-volume)