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Currency trading involves substantial risks, including complete possible loss of funds and other losses. Forex trading is not suitable for every trader. Foreign exchange trading carries risk that may not be suitable for all retail investors.

This position size calculator is for educational purposes only. Never trade alone again. Join thousands of happy forex traders inside the Trading Room. Whether you're starting off with Forex trading basics or you are an experienced trader, we've got what you need.

Start your 7-day free trial today and find out how we can help you. Lot size calculator Not sure about the lot size of your trade? Go to calculator 1 Forex Channel on Youtube K subscribers. How does the Forex lot size calculator work? Instrument Currency pair : Choose instrument AUDCAD AUDCHF AUDJPY AUDNOK AUDNZD AUDSEK AUDSGD AUDUSD BTCUSD CADCHF CADJPY CHFJPY CHFPLN CHFSGD EURAUD EURCAD EURCHF EURCZK EURDKK EURGBP EURJPY EURMXN EURNOK EURNZD EURPLN EURSEK EURSGD EURTRY EURUSD EURZAR GBPAUD GBPCAD GBPCHF GBPJPY GBPNZD GBPPLN GBPSEK GBPSGD GBPUSD GBPZAR HKDJPY MBTUSD NOKJPY NOKSEK NZDCAD NZDCHF NZDJPY NZDSGD NZDUSD SGDJPY USDCAD USDCHF USDCNH USDCZK USDDKK USDHKD USDJPY USDLBP USDMXN USDNOK USDPLN USDSEK USDSGD USDSYR USDTRY USDZAR XAGUSD XAUEUR XAUUSD XRPUSD ZARJPY.

Deposit currency: Choose deposit currency EUR USD GBP CHF JPY AUD RUB PLN HUF ZAR SGD. Entry Level:. Stop Loss Level:. Account Balance:. Position lot size. How do we calculate lot size? Calculations assume that the lot size of the instrument is In real life, this may differ depending on the broker and type of instrument currency pairs, major forex crosses and how many units are there in a lot.

Unlimited functionality is available in our Risk EA. Why use Lot Size Calculator? Manage your risk like a pro! Download our free Risk Manager EA Have you ever thought how awesome it would be if the MetaTrader app calculated your desired risk automatically?

Sign up for a free 7-day free trial Enter the Trading Room and download the Risk Manager EA from the Trading Lab Follow the simple setup guide and login with your ForexSignals. Risk Manager EA. Show more.. Start 7 day free trial. Register now with Google Register now with Facebook. This website uses cookies to improve the user experience. For their part, forex futures markets like the Chicago International Monetary Market or IMM tend to have one basic lot size for all transactions performed in a particular currency pair, although some futures exchanges are seeing the benefits of allowing smaller lot sizes for greater position sizing flexibility.

Due to their standardization of minimum contract sizes, futures contract trades will generally need to be performed in an amount that is some multiple of that most basic or minimum forex contract size or lot size capable of being traded.

In contrast to how lots are used in the currency futures market, the spot forex market which has a larger number of smaller retail traders, seems especially flexible in terms of the lot sizes available for market operators to trade in. Most online forex brokers will offer several different lot size options for traders to use, although it seems important to note that these variations are often governed by minimum account size restrictions in practice.

Furthermore, the size of spot forex trading lots are usually denominated in the base currency that appears first in the quoting convention for a currency pair, which can be called the lot denomination currency.

In the online forex market, the trading lot size offered by brokers can vary considerably, so retail clients enjoy a greater degree of choice in their minimum trading amounts. Also keep in mind that not all lot sizes are made available to all trading account types by online brokers, so make sure that a broker you are considering using will provide you with the lot size you are most interested in trading given the amount of money you have available to deposit in your trading account.

Then there are mini lots. A forex mini lot will usually consist of 10, units of the base currency. This lot size seems especially popular with many retail forex traders since it offers a useful combination of position size flexibility and affordability.

At the lower scale there is the forex micro lot, which usually refers to the standardized amount of just 1, units of the base currency versus the amount of counter currency determined by the exchange rate. Some online forex brokers even offer a smaller lot size than the micro lot in forex trades, which is known as a nano lot, and which is used for buying or selling multiples of units of base currency.

Both of these smaller lot sizes will tend to appeal to:. Finally, if you are a retail trader and have a particular lot size that you prefer to deal in, then you will want to choose an online forex broker that supports that unit, and this consideration should feature prominently in your choice of which broker to partner with. In order for a trader to effectively manage risk and other related specifics, such as an appropriate degree of leverage for their trading account, determining the proper lot size to trade can be of utmost importance, almost as important as deciding which direction you should take a position in.

The size of the lots you trade in, which can affect the size of the positions you take, will directly impact the effect of market moves on the profit or loss resulting from a trading position. Basically, the key to effective risk management is to determine the optimum lot size for the amount of funds you have and are willing to put at risk in your trading account.

Measuring volatility in the currency pairs that we are most interested in trading allows you to gauge market conditions better and make more informed decisions.

In general, the more exchange rates fluctuate, the higher the market volatility is. Not only does volatility change from time to time in a particular currency pair, but volatility can also be different at any given time for the various currency pairs. Currency traders need to be aware of market volatility by having a means to assess it. One popular measure is historical volatility, which is related to the standard deviation of past price movements.

Another more forward looking measure is observing the implied volatility in the option market for the particular currency pair you are trading. When it comes to volatility and lot size choices, traders need to be prepared to adjust their trading sizes downwards as volatility rises and upwards as volatility falls in order to take a more uniform degree of risk when they trade.

Astute traders should also consider adjusting stop loss and profit taking orders appropriately to account for substantial shifts in market volatility. In his classic trading book, Trading in the Zone, author Mark Douglas presents an interesting analogy by which to visualize the impact of using larger or smaller lot sizes when trading.

His example asks the reader to equate for a moment their trading lot size with the degree of support they might have underneath themselves while crossing over a valley, although perhaps visualizing a steep ravine might get the point across even better!

Anyway, Douglas asks the reader to consider the impact of an unexpected event on their crossing of this valley. If a trader uses a small lot size relative to their trading account size, then that is like making the crossing over the valley on a broad and firm bridge. Even if you experienced a storm while on the bridge, you will still probably feel secure in your footing and unlikely to fall off the bridge.

In this analogy, the storm is much like the sharp moves or other severe market turbulence that forex traders can experience from time to time. In contrast, you can consider the situation where a forex trader instead uses a large lot size in relation to the amount of money they have decided to put at risk in their trading account.

When you first get your feet wet with forex training, you'll learn about trading lots. In the context of forex trading, a lot refers to a batch of currency the trader controls.

The lot size is variable. Typical designations for lot size include standard lots, mini lots, and micro lots. It is important to note that the lot size directly impacts and indicates the amount of risk you're taking.

Finding the lot size that best balances opportunity and risk is a very important individual decision. Using a tool like a risk-management calculator can help you clarify your decisions about lot size, but you should do so by factoring in your own risk tolerance and your trading objectives.

The trading lot size directly impacts how much a market move affects your accounts. For example, a pip move on a small trade will not be felt nearly as much as the same pip move on very large trade size. That is why it is important to select the proper lot size.

A lot size that is too large will make the trade riskier and more uncomfortable to hold on to. A lot size that is too small might not generate enough potential gain to be worthwhile. Micro lots are the smallest tradeable lot available to most brokers. They are lots of 1, units of your account funding currency. If your account is funded in U. If you are trading a dollar-based pair, one pip would be equal to ten cents.

Micro lots are very good for beginners who want to keep risk to a minimum while practicing their trading. Before micro lots, there were mini lots. A mini lot is 10, units of your account funding currency. If you are a beginner and you want to start trading using mini lots, make sure that you're well-capitalized. A standard lot is a ,unit lot. Most forex traders you come across are going to be trading mini lots or micro lots. It might not feel glamorous, but keeping your lot size within reason relative to your account size will help you preserve your trading capital to continue trading for the long term.

In his book Trading In The Zone , trading author Mark Douglas offers a useful analogy between choosing a lot size and walking a precarious bridge or even a tightrope. The idea is that the larger the lot size a trader chooses, the more dramatic and emotional the trading experience is likely to become.

To illustrate this example, a very small trade size relative to your account capital would be like walking over a valley on a very wide, stable bridge where little would disturb you even if there were a storm or heavy rains. Now imagine that the larger the trade you place, the smaller and riskier the support or bridge under you becomes.

When you place an extremely large trade size relative to your account balance, the bridge gets as narrow as a tightrope wire. Any small movement in the market could be like a gust of wind, blowing the trader off balance and leading to disaster. The forex market is less regulated than other markets, so requirements like minimum account size are typically set by brokerages.

The first step in calculating forex profit is to measure the movement of the pair. Multiply that profit by your lot size and number of lots. If you used leverage, you'll need to subtract what you borrowed from that amount to learn how much profit you'll get to pocket. Mark Douglas. Table of Contents Expand.

Table of Contents. Lot Size Matters. Trading With Micro Lots. Moving up to Mini Lots. Using Standard Lots. A Helpful Visualization. Frequently Asked Questions FAQs. Trading Forex Trading. By John Russell Full Bio LinkedIn John Russell is an expert in domestic and foreign markets and forex trading. He has a background in management consulting, database administration, and website planning. Today, he is the owner and lead developer of development agency JSWeb Solutions, which provides custom web design and web hosting for small businesses and professionals.

Learn about our editorial policies. Reviewed by Amilcar Chavarria. Amilcar Chavarria is a fintech and blockchain entrepreneur with expertise in cryptocurrency, blockchain, fintech, investing, and personal finance. Learn about our Financial Review Board. How much money do you need to trade forex? How do you calculate forex profit? Article Sources.

Table of Contents Expand. With our free pip calculator you can calculate the pip value in the currency you want to trade in and manage your risk before entering a trade. Some online forex brokers even offer a smaller lot size than the micro lot in forex trades, which is known as a nano lot, and which is used for buying or selling multiples of units of base currency. Home Trading Articles Forex Futures Crypto Stocks Options. In addition, the screenshot image above shows that the calculator also displays those parameters for three scenarios where you are using forex lot sizes of 10,, 50, and , base currency units respectively.

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