Trading Mechanics
Module 6 — Lots and Position Size
Position size is measured in lots. A standard lot is 100,000 units of the base currency, a mini lot is 10,000, a micro lot is 1,000 and a nano lot — where offered — is 100.
| Lot | Units | Approx. pip value (USD quote) |
|---|---|---|
| Standard | 100,000 | $10 |
| Mini | 10,000 | $1 |
| Micro | 1,000 | $0.10 |
Position size is the trader's main risk control. You do not decide it by how confident you feel. You decide it by how much money you are willing to lose if the trade fails, divided by the distance to your stop loss. That single habit separates professionals from gamblers.
Key concepts
- Lots measure position size
- Position size controls exposure
- Size follows stop distance and money risk
Practical example
A wider stop requires a smaller position if the amount at risk stays fixed.
Common mistake
Choosing a lot size from confidence or desired profit.
Knowledge check
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