What is a lot in trading? Lot sizes explained

When you open a trade in MetaTrader you don't type "€500". You type a volume in lots. A lot is a standard unit of size, and getting it wrong is the fastest way to lose money you didn't plan to lose.

Lot sizes in forex

So 0.10 lot of EUR/USD means you control €10,000, and every pip the price moves is worth about $1 to you. (What is a pip?)

Lots are different for every market

A lot is not always 100,000 units. It depends on the instrument and the broker:

Always open the symbol's specification in MetaTrader (right-click the symbol in Market Watch → Specification) and check Contract size before trading something new.

Lot size is not your risk

A common beginner mistake is to think "0.10 lot is small, so it's safe". Lot size only tells you how much each pip is worth. Your actual risk depends on lot size × stop distance:

Risk = Lots × Stop distance × Value per pip (or point) per lot

Example on EUR/USD: 0.10 lot with a 30-pip stop risks 0.10 × 30 × $10 = $30. The same 0.10 lot with a 150-pip stop risks $150.

Example on gold: 0.10 lot with a $10 stop risks 0.10 × 10 × $100 = $100. Gold moves much more than EUR/USD, so the same lot size carries far more risk.

Choose the lot size last

The right order is:

1. Decide how much you can lose on this trade (for example 1% of your account).
2. Put your stop where your idea is proven wrong.
3. Then calculate the lot size that makes that stop cost exactly your planned risk:

Lots = Risk amount ÷ (Stop distance × Value per pip per lot)

Round down to the nearest 0.01. We walk through this with real numbers in the 1% rule, step by step.

Margin is not risk either

The margin MetaTrader shows is the deposit the broker holds while your trade is open. It depends on leverage, not on your stop. A trade can use little margin and still risk a lot. Read leverage and margin explained.

Our free cheat sheet has lot-size tables and worked examples for gold and US30: download it.