Lot size
Forex and metals positions are measured in lots. A standard lot is 100,000 units; brokers typically allow fractions down to 0.01 (a micro lot). For gold (XAUUSD), one standard lot usually means 100 ounces, so a $1 move in the gold price is roughly $100 per lot.
Lot size is the output of position sizing, not an input: you decide risk first, measure the stop distance, and derive the lot size from the two. Fixing the lot size first and hoping is the reverse — and the more common — approach.
Covered in depth in Lesson 07: Position sizing: the arithmetic that keeps you alive.
Related terms
- Position sizing — Deciding how much to risk on each trade — the discipline that determines whether losing streaks are survivable.
- Pip / point — The smallest conventional unit of price movement in a currency pair; its cash value depends on the pair and the lot size.
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