What Is a Lot in Forex? Lot Sizes and Contract Size Explained
You don't trade "some euros". You trade a set amount, called a lot.
What you'll learn
- What standard, mini and micro lots are
- How lot size turns a pip into dollars
- How contract size works on gold, indices and futures
A lot is a fixed amount
You don’t trade “some euros”. You trade a set amount, called a lot.
| Lot | Units of the first currency | Written in MT5 as |
|---|---|---|
| Standard | 100,000 | 1.00 |
| Mini | 10,000 | 0.10 |
| Micro | 1,000 | 0.01 |
So 0.35 lots of EURUSD is 35,000 euros. Most platforms let you trade in steps of 0.01 lots.
Why lot size matters more than anything else
The price move is the same for everyone. What you make or lose on it depends almost entirely on your lot size.
| Trade | 20 pip move on EURUSD |
|---|---|
| 0.10 lots | $20 |
| 1.00 lot | $200 |
| 5.00 lots | $1,000 |
Same idea, same chart, fifty times the result. That is why new traders who “picked the right direction” still blow accounts: they traded a size where an ordinary move against them was more than they could afford.
Worked example
You want to risk no more than $300 on a EURUSD trade, with a stop loss 25 pips away.
- Each pip may cost at most $300 divided by 25 = $12.
- One standard lot is $10 a pip, so $12 a pip is 1.2 lots.
That is position sizing in one line, and Course 3 builds on it.
Contract size outside forex
The same idea applies to every market, but the “lot” is defined differently:
- Gold (XAUUSD) CFDs: usually 1 lot = 100 ounces, so a $1 move in gold is $100 a lot. Some firms use other sizes; check the contract specs in your platform.
- Index CFDs (US500, US100, US30): 1 lot is often $1 or $10 a point depending on the broker or firm.
- Futures: the exchange fixes the size. One ES contract is $50 a point and one MES is $5 a point, everywhere.
In MT5 you can see a symbol’s contract size by right-clicking it in Market Watch and choosing Specification.
Common mistakes
- Assuming 1 lot of gold behaves like 1 lot of EURUSD. A $10 move in gold on 1 lot is $1,000.
- Copying someone’s lot size without knowing their account size or stop distance.
- Adding to a losing trade, which doubles the size just as the idea is going wrong.
How this works at a prop firm
Prop firm accounts are big ($50,000 to $200,000 is common), which tempts people to trade big lots. But the daily loss limit is usually 3% to 5% of the starting balance, so on a $100,000 account you might have $5,000 of room for the whole day. Some firms also cap the lot size or number of contracts you can open. Size from your stop and your loss limit, not from the account size. See max risk per trade rules, prop firm position sizing and the best account size to start with.
Key takeaways
- 1 standard lot = 100,000 units, 0.10 = mini, 0.01 = micro.
- Lot size decides how much a pip is worth to you, so it decides your risk.
- Gold, index CFDs and futures each have their own contract size; always check the specs.
Check yourself
3 quick questions. Your answers stay on this device.
-
How many units is 0.25 lots of GBPUSD?
0.25 times 100,000 = 25,000.
-
You can risk $200 with a 20 pip stop on EURUSD. What size?
$200 / 20 = $10 a pip = 1 standard lot.
-
Gold moves $5 against you on 1 lot of 100 ounces. What is the loss?
$5 times 100 = $500.
Go deeper
Educational content, not financial advice. Trading carries a high risk of loss, and most traders lose money. How we make money.