Forex Lot Size Calculation Examples: The Formula and 5 Cases From Your Risk

In short: work back to lot size from acceptable loss and stop distance

The basic formula and 4 steps for lot size

The formula is lot size = acceptable loss ÷ (stop-loss pips × value of 1 pip per lot). From the amount you can afford to lose on one trade, you work back to the lot size you can trade.

For example, with an acceptable loss of $100, a 25-pip stop and EURUSD (1 pip = $10), 100 ÷ 250 = 0.4 lots.

Differences in pip value: dollar pairs, yen crosses and gold

The value of 1 pip depends on the size of 1 lot and the settlement currency. For a dollar pair on a USD account, 1 lot (100,000 units) is about 10 USD per pip.

For gold, the definition of a pip can differ by broker. Thinking of profit and loss as how many dollars the price moves, not in pips, helps avoid mistakes.

USD-account lot size examples in 5 cases

Here are 5 cases with different funds, risk percentages and currency pairs. All assume 1 lot = 100,000 units (100 oz for gold).

When the result does not divide evenly, as in case C, round down to the nearest 0.01 lot. Note that case E measures the stop distance in dollars, not pips.

• To check, see whether lots × stop-loss pips × value of 1 pip is at or below your acceptable loss
• Case B is 0.4 × 25 × 10 = $100, exactly your acceptable loss
• Case C is 0.52 × 30 × 6.4 = $99.84, within your acceptable loss
• Spreads and slippage can make the actual loss a little larger

How to round to 0.01 lots

Results often do not divide evenly, such as 0.125. Rounding up would exceed your acceptable loss, so as a rule you round down.

• The minimum lot and step differ by broker and account type, so check the official page
• If the calculated value is below the minimum lot, review the stop distance or sit out
• To start small, some accounts, such as cent accounts, use smaller units
• Forcing the lot up to the minimum can push your risk percentage past what you planned

Checking leverage and required margin

Once you have the lot size, check that the required margin fits within your account balance. A guide is lots × contract size × price ÷ leverage.

• Raising leverage does not change the loss when you hit your stop-loss
• With little spare margin, an unrealized loss can lower your margin level more easily
• Maximum leverage differs by broker and regulation, so check the official page
• You can read about margin level and stop-out in the related column

How lot size relates to cashback

Many cashback systems calculate returns from the lots you trade. The more lots you trade, the more you get back, so it is tempting to raise them.

Return amounts are not yet confirmed, and we will post them on each broker's page at launch. The basic rule is to decide lot size from your acceptable loss, not from the return amount.

• Keep your lot size fixed at the number worked back from your acceptable loss
• If you raise lots to increase returns, your loss grows at the same ratio
• Eligible instruments and return conditions differ by broker, so check the official page
• Returns are not a guarantee to make up for losses