Trading mechanics
Mini lot
10,000 units of the base currency, one tenth of a standard lot. On most dollar-quoted pairs it is worth about $1 per pip, which is the size most small evaluation accounts actually trade.
GFN’s figure
On a $25,000 GFN 2 Step account, the 5% daily loss limit is $1,250 - 1,250 pips at one mini lot worth $1 per pip, or 25 setups risking 50 pips each.
In detail
Mini lot,explained
Mini lots are where position sizing becomes granular enough to respect a small daily limit. At $1 per pip, a 50-pip stop risks $50 - a figure that fits inside a small account's allowance many times over.
Sizing in mini lots also makes partial exits practical, because a position can be reduced in meaningful steps without closing it entirely.
Related
Terms thatcome with it
Most rules only make sense next to the ones they interact with. These are the entries this one depends on.
Lot
The unit position size is measured in. One standard forex lot is 100,000 units of the base currency; mini and micro lots are one tenth and one hundredth of that.
Standard lot
100,000 units of the base currency - the full-size forex contract. On most dollar-quoted pairs it is worth roughly $10 per pip, which makes it the reference every other size is scaled from.
Micro lot
1,000 units of the base currency, one hundredth of a standard lot. Worth roughly $0.10 per pip on most dollar-quoted pairs, it is the smallest size most accounts can trade.
Position size
How many lots a trade is placed in. It is calculated from the dollar amount being risked and the stop distance, not chosen first - which is the reverse of how most traders approach it.
Pip
The standard unit of price movement in forex - 0.0001 for most pairs, 0.01 for yen pairs. A pipette is one tenth of a pip, which is why most quotes carry a fifth or third decimal place.
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