By BrokaBoy Research Team · Reviewed 13 October 2026 · Updated 13 October 2026 · 7 min read
Lot size = money you are willing to risk ÷ (stop-loss in pips × pip value per standard lot). For example, risking $20 with a 25-pip stop on EUR/USD, where one standard lot (100,000 units) is worth $10 per pip, gives 20 ÷ (25 × 10) = 0.08 lots. Always round down to your broker's lot step so you never risk more than planned.
Key takeaways
Start from the money you will risk, not from the lot size you would like to trade.
Lots = risk amount ÷ (stop pips × pip value per 1.00 lot), all in your account currency.
1 standard lot = 100,000 units; 0.10 = mini (10,000); 0.01 = micro (1,000).
Pip value per lot changes with the pair and your account currency; convert it before dividing.
Round down to the nearest 0.01 lot and re-check the actual risk.
The lot size formula
Lot size = risk amount ÷ (stop-loss in pips × pip value per standard lot)
Three inputs, all in your account currency:
Risk amount: how much you accept losing if the stop is hit. Usually a percentage of your balance (for example 1% of $2,000 = $20).
Stop-loss distance: in pips, from your entry to your stop. This comes from the chart (structure, volatility), never from the size you want to trade.
Pip value per 1.00 lot: what one pip is worth on 100,000 units of that pair, converted into your account currency.
The result is in standard lots. Round it down to your broker's minimum step (usually 0.01).
Lot size converter
Standard lots (100,000)0.1000
Mini lots (10,000)1.000
Micro lots (1,000)10.00
Gold lots (100 oz)100.00
Formula: lots = units ÷ contract size (forex standard lot = 100,000 units; gold = 100 oz)
You enter all prices and exchange rates yourself; nothing is fetched live. Results are estimates and exclude broker-specific charges.
USD/JPY at 150.00. Pip value per lot = 100,000 × 0.01 ÷ 150 = $6.67
Lots = 75 ÷ (40 × 6.667) = 75 ÷ 266.67 = 0.281 → 0.28 lot
Check: 0.28 × 40 × $6.667 = $74.67, just under the limit.
Because the yen pip value depends on the USD/JPY rate, the same 0.28 lot risks a slightly different dollar amount if USD/JPY is at 140 or 160. The USD/JPY pip value tool handles this live.
Example 3: EUR/GBP, USD account (a cross pair)
Balance $3,000, risk 1% = $30
Stop: 30 pips
Pip value per lot in GBP = 100,000 × 0.0001 = £10. Converted at GBP/USD 1.2700: 10 × 1.27 = $12.70
The same logic works for a naira account: at an illustrative USD/NGN of 1,500, one pip per standard lot on GBP/USD is ₦15,000.
Example 5: EUR/USD in a euro account
Balance €10,000, risk 1% = €100
Stop: 35 pips
Pip value per lot = $10. In euros at EUR/USD 1.0850: 10 ÷ 1.085 = €9.22
Lots = 100 ÷ (35 × 9.2166) = 100 ÷ 322.58 = 0.310 → 0.31 lot
Check: 0.31 × 35 × €9.2166 = €100.00 (to the cent at this rate).
Note the direction: for a euro account you divide the USD amount by EUR/USD, because that rate is dollars per euro. For ZAR and NGN you multiply, because those rates are quoted as local currency per dollar.
Example 6: Gold (XAUUSD), USD account
Gold is not quoted in pips the same way, so work in dollars of price movement. On most brokers 1 lot = 100 oz, so each $1 move = $100 per lot.
Brokers differ on whether a gold "pip" is $0.01 or $0.10, and some use smaller contracts, so check the symbol specification. Details in our gold pip value guide and the gold lot size calculator.
Quick reference: lots for a $1,000 account at 1% risk ($10)
EUR/USD or any USD-quoted pair, USD account:
Stop-loss
Exact lots
Lots to use
Actual risk
10 pips
0.100
0.10
$10.00
15 pips
0.067
0.06
$9.00
20 pips
0.050
0.05
$10.00
30 pips
0.033
0.03
$9.00
50 pips
0.020
0.02
$10.00
100 pips
0.010
0.01
$10.00
Notice that doubling the stop halves the lot size. The money at risk stays constant; that is the whole point of position sizing.
Special cases
Wide stops on higher timeframes
Swing traders on the daily chart often need 100–150 pip stops. With $5,000 at 1% ($50) and a 120-pip EUR/USD stop: 50 ÷ (120 × 10) = 0.0417 → 0.04 lot, risking $48. The position looks tiny, and that is correct. Small size with a wide stop gives the same money at risk as a large size with a tight stop.
Splitting one trade into two entries
Say you want to buy GBP/USD with a total risk of $40, half at 1.2700 and half on a dip to 1.2680, both with the stop at 1.2650.
Entry 1: 50 pips of risk. $20 ÷ (50 × 10) = 0.04 lot
Entry 2: 30 pips of risk. $20 ÷ (30 × 10) = 0.067 → 0.06 lot
If both fill and the stop is hit: (0.04 × 50 × 10) + (0.06 × 30 × 10) = $20 + $18 = $38
Calculate each entry separately against its own share of the risk budget. Do not use the average entry price for sizing, or the total can exceed your limit.
Prop firm accounts
Prop challenges typically cap daily loss (often around 5%) and total drawdown (often around 10%). Size from a risk per trade well below the daily limit, so two or three losers in a day do not breach it. On a $100,000 challenge, 0.5% per trade ($500) with a 25-pip EUR/USD stop is 500 ÷ 250 = 2.00 lots. Check your firm's exact rules; they vary.
Lot size vs margin: check both
The formula tells you the right size for your risk. You also need enough free margin to open it:
Margin = lots × 100,000 × price (for the base currency in USD) ÷ leverage
Example 1's 0.08 lot EUR/USD at 1.0850 is a notional of 8,000 × 1.0850 = $8,680. At 1:30 leverage that needs $289.33 of margin; at 1:500, $17.36. Either fits a $2,000 account. If margin ever prevents you opening the size the formula gives, you have too many positions open. Read forex margin explained.
Mistakes that wreck the calculation
Choosing the lot first and the stop second. This shrinks stops to fit the size you want, and they get hit by noise.
Using $10 per pip for every pair. USD/JPY, USD/CAD and crosses differ; using $10 for a pair worth $6.67 per pip oversizes your risk by about 50%.
Forgetting your account currency. A ZAR or EUR account must convert pip value first.
Ignoring the spread. Include it in the stop distance, especially on exotic pairs where it can be 20+ pips.
Stacking correlated trades. Three 1% trades on EUR/USD, GBP/USD and AUD/USD can behave like one 3% trade. See position sizing.
Rounding up "because it is only a little more".
Pre-trade checklist
Risk amount written in account currency (not just "1%").
Stop placed from the chart, spread included, distance measured in pips (or dollars for gold).
Correct pip value for this pair and this account currency, at today's rate.
Lots calculated and rounded down to the broker's step.
Actual risk re-checked by multiplying back.
Free margin confirmed, and no correlated position already open in the same direction.
If any line fails, do not place the trade until it passes. Two minutes of arithmetic is cheaper than one oversized loss.
Tools that do this for you
Once you understand the maths, use a calculator every time; it removes arithmetic errors when you are under time pressure. The position size calculator works from balance and risk %, and the lot size calculator supports different account currencies. For small balances, see the small account lot size calculator.
Brokers that allow 0.01-lot trading (and cent accounts) make it easier to size accurately on smaller balances. Minimum lot sizes and steps vary by account type, so confirm them in your platform's symbol specification.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading CFDs. Consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Full risk disclosure.
Frequently asked questions
What lot size should a beginner use?
There is no single right lot size; it depends on your balance and stop distance. A beginner with $500 risking 1% ($5) on a 25-pip EUR/USD stop would use 0.02 lot. In practice, most beginners should start at 0.01 lot on major pairs and only increase size when the formula, not confidence, says they can. Size from risk, not from how sure you feel.
What lot size is good for a $100 account?
With $100 and a 1% rule you can risk $1. On EUR/USD, 0.01 lot is worth $0.10 per pip, so $1 covers a 10-pip stop. At 2% ($2) you could use a 20-pip stop. Anything above 0.01 lot on a $100 standard account means risking more than 2% on normal stops. A cent account allows finer sizing if you need wider stops.
How do I calculate lot size for gold?
Use the same formula with gold's contract. On most brokers 1 lot of XAUUSD is 100 oz, so each $1 move in price is worth $100 per lot. Lots = risk ÷ (stop in dollars × 100). With $10 at risk and an $8 stop: 10 ÷ 800 = 0.0125, rounded down to 0.01 lot. Check your broker's contract size, since some use 10 oz or other units.
Should I round lot size up or down?
Round down. Brokers usually accept lots in steps of 0.01, so a calculation of 0.0787 must become 0.07 or 0.08. Rounding down keeps your loss at or below your risk limit; rounding up exceeds it. Over hundreds of trades, consistently rounding up adds meaningful extra risk. If rounding down gives zero, the trade is too large for your account at that stop distance.
Does leverage change my lot size?
Leverage does not appear in the lot size formula. It only determines how much margin a position needs, which sets the maximum size you could open. Your correct size comes from risk amount, stop distance and pip value. High leverage lets you open far bigger positions than the formula suggests, which is exactly how accounts get wiped out. Use the formula first, then confirm you have enough free margin.
