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Risk

Lot size — definition & meaning

The quantity of a trade, which sets how much each pip is worth.

Lot size is how big your trade is, and it directly sets your pip value and therefore your risk. Standard, mini, micro and nano lots step down in size by factors of ten.

Choosing lot size to match your stop distance and risk-per-trade percentage is the practical output of position sizing. Oversizing is one of the fastest ways to blow an account.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Lot
A standard trade size unit; in forex one standard lot is 100,000 units.
Pip value
How much money one pip of movement is worth for your position.
Position sizing
Choosing how large a trade to place based on your risk per trade.
Leverage
Borrowed exposure that lets you control a large position with a small deposit.
Margin
The deposit a broker holds to keep a leveraged position open.
Free margin
The money in your account still available to open new trades.

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