Lot size — how big is your trade, really
A lot is just the unit of measurement for how big your trade is. A standard lot is 100,000 units of the base currency. That's huge — way more than most beginners should ever touch directly.
A mini lot is 10,000 units. A micro lot is 1,000 units — usually around $0.10 per pip movement. Most beginners should start here, or even smaller if your broker allows it.
Bigger lot size means bigger swings in both directions — more profit if you're right, more loss if you're wrong. This is exactly why Module 4 exists: size is the single biggest thing that decides whether one bad trade is annoying or catastrophic.
Pip value doesn't just depend on lot size — it also depends on which currency the pip value is calculated in versus your account's currency. If your account is funded in Naira but you're trading a Dollar-based pair, the actual pip value in your local currency shifts slightly with the exchange rate itself. Most platforms calculate this automatically, but it's worth knowing it's happening in the background.
A useful habit: before every trade, glance at exactly how much a full stop-loss-sized move will cost you in real currency, not just in pips. Pips are an abstraction; the number that actually shows up in your account balance is what matters, and translating between the two before you enter is what separates planned risk from a surprise.
Key takeaway
Lot size decides how much a single pip is actually worth to you. Start small — micro lots — until you've proven you're consistent.
Example
On a micro lot, a 100 pip move on EUR/USD is roughly $10. On a full standard lot, that exact same 100 pip move is $1,000. Same chart, same move — 100 times the outcome, just from size.
Try this
If you have $500, work out what 1% of that is — $5. That's roughly what a single micro-lot trade with a reasonable stop loss should be risking. Write that number down somewhere you'll actually see it.
This lesson is part of the free TDWK Academy — 40 lessons from zero to funded trader, with progress tracking and a certificate exam.
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