Home /Glossary / Lot

Lot

Also called: Standard lot · Mini lot · Micro lot · Position size · Volume

Lot — The unit of position size in forex — one standard lot is 100,000 units of the base currency.

Lot size is the least discussed and most consequential number in a trade. Entry technique gets the attention; position size does most of the damage.

In plain English

A standard lot is 100,000 units of the base currency — the first currency in the pair. Buy one standard lot of EURUSD and you are long 100,000 euros. A mini lot is 10,000 units (0.10 lots), a micro lot is 1,000 (0.01 lots), and most brokers accept 0.01 as the minimum increment.

MT4 and MT5 statements record position size in the “Size” or “Volume” column, in lots. A row reading 0.79 is 79,000 units of the base currency — brokers allow arbitrary two-decimal sizes, not just the round tiers.

For a pair quoted against the US dollar, lot size and pip value are directly proportional: one standard lot is $10 per pip, so 0.79 lots is $7.90. That proportionality is why doubling your size doubles both your profit and your loss, and why it is the fastest way to change the shape of an account in either direction.

Leverage is a separate concept that is frequently conflated with this one. Leverage determines the margin your broker requires to hold a position; lot size determines how much money each price movement is worth. You can be over-sized on low leverage and conservatively sized on high leverage. It is the lot size that does the damage.

The formula

Worked example — the demo account

The same demo trade, read as a sizing decision rather than an outcome — ticket #900087, GBPUSD short:

Identical trade, identical decision quality — the size chose the size of the outcome.

Which cuts both ways, and the cut that matters is the other one. The demo account’s worst trade lost −$393.41; at a quarter of the size it would have lost $82. Nothing about the analysis would have differed.

Across the demo account, position sizes range from 0.05 to 0.90 lots — an eighteen-fold spread. That variation is one reason the standard deviation of results is $240.49 against an expectancy of +$44.72, and it is why reviewing in R-multiples rather than currency is worth the effort: R divides the sizing back out.

Every figure above is from the demo account TapeSheet ships with — 96 closed trades, generated from a fixed seed. Open the same account →

What this does not tell you

The caveat is the part worth reading. Most tools put it in a footer, if they print it at all.

• Lot size is not risk. Risk is lot size × stop distance. One lot with a 5-pip stop risks less than 0.1 lots with a 100-pip stop. Reviewing sizes without stops tells you nothing.
• The statement’s size column does not show partial closes cleanly. MT5 in particular reports deals rather than positions; TapeSheet reconstructs positions FIFO, but a partially closed trade can still look odd in the raw file.
• It says nothing about correlation. Three 0.5-lot longs in EURUSD, GBPUSD and AUDUSD are not three positions, they are approximately one 1.5-lot short-dollar position. Statements have no concept of this and neither does any per-trade metric.
• Lots do not translate across asset classes. One lot of gold, one lot of US30 and one lot of EURUSD are entirely different exposures. The contract specification is the only authority, and it is set per broker.

Where TapeSheet shows it

Every trade’s size is in the Trades table and its detail drawer, and there is a lots total in the per-symbol breakdown. If you enter planned risk on a trade, TapeSheet computes the R-multiple that makes trades of different sizes comparable — which is the reason lot size stops mattering once your review is in R.

Related terms

• Pip — The standard smallest price increment for a currency pair — 0.0001 for most, 0.01 for pairs quoted against the yen.
• R-multiple — A trade result expressed as a multiple of the money you planned to risk on it — a +2R trade made twice what you were prepared to lose.
• Maximum drawdown — The largest fall from a peak in your account to the lowest point that followed it, before a new peak was made.
• Slippage — The difference between the price you expected to trade at and the price you actually got.

All glossary terms ·Free trading journal ·MT4 statement analyzer ·MT5 report analyzer