What Is a Trading Lot in Forex? Standard, Mini & Micro Lots Explained
BY TIOmarkets
|March 25, 2026In forex trading, a lot is the standard unit used to measure the size of a trade. Rather than specifying a trade in terms of a currency amount directly, traders express their position size in lots.
The lot size you choose determines how much of a currency pair you are buying or selling, how much each pip move is worth in monetary terms, and how much margin is required to open and hold the position.
A lot size calculator can do much of this for you.
Understanding how lots work is one of the most fundamental steps in getting to grips with how forex trading operates.
Why Lots Exist in Forex
Forex has historically been an institutional market, where transactions were conducted in large, standardised blocks. The standard unit that emerged from this history is the standard lot, which represents 100,000 units of the base currency in a pair. Trading in standardised blocks makes it easier to quote prices consistently and to calculate the value of price movements across participants.
As retail forex trading developed, smaller lot sizes were introduced to make the market accessible to traders with smaller capital bases. Mini lots, micro lots, and in some cases nano lots allow traders to take on proportionally smaller positions, reducing the monetary impact of each pip movement and making it possible to manage risk more precisely relative to account size.
The Four Lot Sizes
Standard lot
A standard lot equals 100,000 units of the base currency. On a pair like EURUSD, one standard lot means you are buying or selling 100,000 euros. For most major pairs where the quote currency is USD, a one-pip move on a standard lot produces a profit or loss of approximately $10, assuming a USD-denominated account. This is the largest of the common lot sizes and carries the highest margin requirement and pip value per lot.
Mini lot
A mini lot equals 10,000 units of the base currency, which is one tenth of a standard lot. A one-pip move on a mini lot of a major USD-quoted pair produces approximately $1 in profit or loss for a USD account holder. Mini lots allow traders to take on positions that are meaningfully sized without the full capital requirement of a standard lot, making them a common choice for traders who are scaling up from smaller accounts.
Micro lot
A micro lot equals 1,000 units of the base currency, which is one tenth of a mini lot and one hundredth of a standard lot. A one-pip move on a micro lot of a major USD-quoted pair produces approximately $0.10 for a USD account holder. Micro lots are well suited to traders who are newer to live trading, working with smaller account balances, or testing a strategy under live conditions with limited capital at risk per trade.
Nano lot
A nano lot equals 100 units of the base currency, which is one tenth of a micro lot. A one-pip move on a nano lot of a major USD-quoted pair produces approximately $0.01 for a USD account holder. Nano lots represent the smallest standard unit of trade size and are relatively uncommon across brokers. They allow extremely fine-grained position sizing, which can be useful for traders managing very small accounts or practising precise lot size calculations with minimal monetary exposure.
How Lot Size Connects to Pip Value
The pip value of a trade is directly proportional to the lot size. For a USD-quoted pair such as EURUSD, the relationship is straightforward for a USD account holder. One standard lot produces approximately $10 per pip, one mini lot produces approximately $1 per pip, one micro lot produces approximately $0.10 per pip, and one nano lot produces approximately $0.01 per pip.
For pairs where the quote currency is not USD, the pip value in USD terms requires a conversion at the prevailing exchange rate. The same applies when the account is held in a currency other than USD. In practice, the pip value for any given lot size and instrument can be calculated using a pip value calculator, which handles the currency conversion automatically.
Understanding the pip value at your chosen lot size is essential before placing a trade, because it determines directly how much money you stand to gain or lose for each pip the market moves.
How Lot Size Connects to Margin
Margin is the amount of capital required to open and hold a leveraged position. It is calculated as a percentage of the full notional value of the trade. Because the notional value of a trade increases with lot size, the required margin increases proportionally.
For a major forex pair with a 1% margin requirement, one standard lot with a notional value of $100,000 requires $1,000 in margin. One mini lot requires $100. One micro lot requires $10. One nano lot requires $1. These figures are illustrative for a USD pair at a 1% margin rate and will vary depending on the instrument, the current price, and the applicable margin requirement.
Choosing a lot size that keeps your margin requirement well within your available account balance is an important part of managing your exposure. Trading at a lot size that uses a large proportion of your available margin leaves little room to absorb adverse price movement before a margin call is triggered.
Lot Size in Practice: Whole Numbers and Decimals
In a trading platform, lot size is entered as a decimal number. A standard lot is entered as 1.0. A mini lot is entered as 0.1. A micro lot is entered as 0.01. A nano lot, where supported, is entered as 0.001. You can also trade in multiples of any of these sizes. For example, entering 2.5 lots means you are trading two and a half standard lots, or 250,000 units of the base currency.
Most brokers set a minimum and maximum lot size per trade. The minimum lot size determines the smallest position you can open on a given instrument. The maximum lot size sets an upper limit per trade, separate from any account-level position limits.
How to Choose a Lot Size
Lot size selection is a risk management decision rather than a market view decision. The starting point is determining how much of your account you are prepared to risk on a single trade, then working backwards to find the lot size that produces that monetary risk at your chosen stop loss distance.
The formula is:
Lot size = risk amount ÷ (stop loss in pips × pip value per lot)
If you are willing to risk $100 on a trade with a 20-pip stop loss, and the pip value is $10 per standard lot, the calculation gives you 0.5 lots. This approach keeps the monetary risk consistent regardless of stop loss distance, rather than trading a fixed lot size that produces variable monetary risk depending on where the stop is placed.
Applying this approach consistently across trades is one of the practical foundations of position sizing and risk management.
Trading Lots at TIOmarkets
Four account types are available, each with different minimum lot sizes and cost structures.
The Standard account has a minimum lot size of 0.01 (micro lot), a maximum of 20 lots per trade, spreads from 1.1 pips, and no commission. It is created automatically on registration. The Raw account also has a minimum lot size of 0.01, spreads from 0.0 pips, and a commission of $6 per round turn lot, with a minimum deposit of $250. The VIP Black account has a minimum lot size of 0.01, spreads from 0.3 pips, no commission, and a minimum deposit of $1,000. Both Raw and VIP Black must be opened separately via the client area.
The Nano account, available on MT5 only, has a minimum lot size of 0.001, which corresponds to nano lot trading. It carries spreads from 0.6 pips and a commission of $6 per round turn lot, with a minimum deposit of $20. The Nano account is designed for traders who want to work with very small position sizes, making it well suited to those practising precise lot size calculations or managing small account balances with fine-grained risk control.
All spread figures are variable and typically higher than minimum figures shown. Leverage is subject to change depending on market conditions and applicable regulatory requirements. Hedging is permitted on all account types. Traders seeking a swap-free arrangement should contact TIOmarkets directly to enquire about Islamic account eligibility and applicable conditions.
Copy trading is available at TIOmarkets on both MT4 and MT5, allowing followers to copy strategy providers in real time.
FAQ
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