Qazi Forex TipsIn this lecture
- What lot sizes are in forex
- Position size calculation for risk management
- Calculating lot size in MetaTrader
Managing the lot size on every trade is the habit this lecture is about: the right lot for your risk, on every single trade.
From the lecture
A fixed risk on every trade and a stop loss you place first. Protecting the account comes before everything else.
How Dr. Qazi teaches
Learn and practise on a demo account first. When you go live, use only money you can afford to lose and keep the risk on each trade small, for example 1% of the account.
From our FAQ
Lesson notes
Lot sizes
- 1.00 standard lot = 100,000 units of the base currency.
- 0.10 mini lot = 10,000 units.
- 0.01 micro lot = 1,000 units.
On EURUSD, 1 standard lot is about $10 per pip, so 0.01 lot is about $0.10 per pip. On Gold, most brokers use 100 ounces per lot, so 0.01 lot moves about $1 for every $1 move in price. Always check your broker's contract size.
The formula
Lot size = money at risk ÷ (stop loss in pips × pip value per lot).
Example: $1,000 account, 1% risk = $10. EURUSD stop loss 25 pips. 25 × $10 = $250 per standard lot, so $10 ÷ $250 = 0.04 lot.
Do it the same way every time
A fixed lot (always 0.10, say) means your risk changes with every stop loss. Calculate from the stop each time, or let a tool do it: QFT Trade Assistant calculates the lot from your risk and SL line in MT5 and MT4.
Khulasa (Roman Urdu / Hindi)
- 1 lot = 100,000; 0.10 = 10,000; 0.01 = 1,000 units.
- EURUSD: 1 lot ≈ $10/pip. Gold: 0.01 lot ≈ $1 per $1 move.
- Lot = risk $ ÷ (SL pips × pip value).
- Har trade ka lot SL se nikalein, fixed lot nahi.
Questions
What is a lot in forex?
A standard unit of trade size: 1 lot is 100,000 units of the base currency.
How much is 0.01 lot in forex?
A micro lot, 1,000 units. On EURUSD it is about $0.10 per pip.
What lot size should I use for a $100 account?
With 1% risk ($1) and a 10-pip stop on EURUSD, 0.01 lot. A wider stop would need an even smaller size, which most brokers do not allow.
How do I calculate lot size for Gold?
Divide your risk in dollars by the stop distance in dollars of price times the value per lot (about $100 per $1 move per lot on most brokers).
Does leverage change the lot size I should use?
No. Leverage changes the margin needed, not the risk per pip. Calculate the lot from your risk and stop loss.
What is pip value?
The money one pip of movement is worth for a given lot size; it depends on the pair and your account currency.
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