GLOSSARY · POSITION SIZING
What is lot size in forex trading?
Lot size is the quantity of an instrument traded in a single position, expressed as a multiple of the standard contract for that symbol.
What it means
One standard lot is 100 troy ounces of gold, 100,000 units of the base currency on a major FX pair, and something different again on indices. The number in the order ticket therefore means nothing on its own — 1.00 lot of gold and 1.00 lot of EURUSD are not comparable positions.
Why it matters
Lot size is the output of position sizing, never the input. The correct sequence is account balance, then risk percentage, then stop distance, and only then the lot size that makes those three consistent. Choosing a lot size first and placing a stop wherever it happens to allow is the most common way retail accounts are lost.
What this changes in practice
Brokers impose a minimum, usually 0.01 lots, and on gold that floor has teeth. At 0.01 lots a $10 stop already risks $10, so on a $100 account a single trade is 10% of the balance no matter what risk percentage you configured. The lot size calculator warns when the broker minimum has silently overridden your setting, which is the specific failure this floor causes.
Related terms
- Contract sizeContract size is how many units of the underlying instrument one standard lot represents, and it…
- Micro lotA micro lot is one hundredth of a standard lot — 0.01 in the order ticket — and is the smallest …
- Position sizePosition size is the lot quantity chosen so that the distance to your stop loss equals a predete…
- LeverageLeverage is the ratio between the notional value of a position and the margin required to hold i…
Educational information only, not financial advice. Trading leveraged products carries substantial risk of loss. Last updated 2026-08-11.