Lot size
Lot size is the quantity of an instrument you buy or sell in one position, measured in standardized units. In forex, one standard lot is 100,000 units of the base currency.
Because currency moves are quoted in pips, lot size is what converts a price move into money. On EURUSD, one pip is worth about $10 per standard lot, so the same 20-pip move can cost $200 or $2 depending purely on size.
| Lot type | Size (units) | EURUSD pip value |
|---|---|---|
| Standard (1.00) | 100,000 | about $10 |
| Mini (0.10) | 10,000 | about $1 |
| Micro (0.01) | 1,000 | about $0.10 |
Lot size and stop distance together set your dollar risk: risk equals lots times pip value times stop in pips. Choosing the lot size that makes a planned dollar risk come true is called position sizing, and it matters more to account survival than entry timing.
Example
You buy 0.25 lots of EURUSD with a 30-pip stop. Pip value is 0.25 × $10 = $2.50, so the trade risks 30 × $2.50 = $75 — 0.75% of a $10,000 account.
In a prop-firm challenge
Most evaluation accounts cap the daily loss at around 4–5% of the starting balance. Oversizing a single trade can spend most of that allowance at once: on a $10,000 account with a $500 daily loss limit, a 1.00-lot EURUSD position with a 40-pip stop risks $400, or 80% of the day's room. Sizing in minis rather than standard lots is often what keeps an account inside the rules.