When you place a forex trade, you choose a lot size — and that single choice decides how much each price move is worth, and how much you can win or lose. Getting it right is the heart of risk management. This guide explains what a lot is, the different lot sizes, and how to pick the right one.
What is a lot in forex?
A lot is the standard unit of trade size in forex. It tells you how many units of the base currency you are trading. Instead of saying “100,000 euros,” traders just say “1 lot of EUR/USD.”
Forex lot sizes explained
| Lot type | Size you enter | Units | 1 pip value* |
|---|---|---|---|
| Standard lot | 1.0 | 100,000 | $10 |
| Mini lot | 0.1 | 10,000 | $1 |
| Micro lot | 0.01 | 1,000 | $0.10 |
*Approximate pip value for US-dollar-quoted pairs. See what is a pip.
At SCapitalFX you can trade from 0.01 lots (a micro lot), which keeps each pip worth about 10 cents — ideal while you learn.
Why lot size matters so much
Your lot size directly controls your risk. The same 30-pip loss is:
- $300 on a standard lot
- $30 on a mini lot
- $3 on a micro lot
Same market move, very different outcomes — which is why beginners should start small.
How to choose the right lot size
Professionals size trades from their risk, not their hopes. The formula:
Lot size = (risk in $) ÷ (stop-loss in pips × pip value per lot)
Worked example
Say you have $1,000 and risk 1% ($10) on a trade with a 50-pip stop-loss:
- You need a pip value of $10 ÷ 50 = $0.20 per pip.
- Since a micro lot is $0.10 per pip, that is about 0.02 lots.
This way, even if the trade hits your stop, you only lose the $10 you planned to risk.
Risk warning: Trading forex on margin carries a high level of risk. Position sizing controls your risk, but you can still lose your invested capital. Never risk money you cannot afford to lose.
Frequently asked questions
What is the smallest lot I can trade?
At SCapitalFX you can trade from 0.01 lots (a micro lot), so you can keep positions and risk very small.
How much is 1 lot worth?
A standard lot is 100,000 units, where each pip is about $10 for US-dollar pairs. A mini lot is $1 per pip and a micro lot $0.10.
What lot size should a beginner use?
Start with micro lots (0.01) and size each trade so you risk only 1–2% of your balance.
Does lot size change for gold or indices?
Yes — each market has its own contract size. For example, 1 lot of gold is 100 ounces and 1 lot of an index is 1 contract. Check each instrument’s details before trading.
Practise your sizing
Open a free demo or live account and practise lot sizing with micro lots. New? Start with how to start with $10 and our beginners guide.