What is lot size in forex?+
A lot is a standardized trade size. 1 standard lot = 100,000 units of the base currency, 1 mini lot = 10,000 units, and 1 micro lot = 1,000 units. Lot size determines how much each pip of movement is worth in your account currency.
How do you calculate lot size from risk percentage?+
Lot size = (Account Balance × Risk %) ÷ (Stop Loss in pips × Pip Value per lot). For example, a $10,000 account risking 1% with a 20-pip stop loss on a pair with a $10/pip value per standard lot gives a lot size of ($10,000 × 0.01) ÷ (20 × $10) = 0.5 lots.
What lot size should a beginner use?+
Beginners should risk no more than 1-2% of their account per trade and generally trade micro or mini lots until they have a consistent track record. On a $1,000 account, that typically means 0.01-0.05 lots depending on stop-loss distance.
Does lot size change for gold (XAUUSD) vs forex pairs?+
Yes. Pip value per lot differs by instrument — most forex majors are close to $10/pip per standard lot, while gold's pip value depends on your broker's contract specification. Always check your broker's contract specs before sizing a gold trade.