Before you copy a single signal, you need to understand three things: pips, lots, and position size. Get these right and you survive; get them wrong and one trade can wipe you out.
What is a pip?
A pip is the standard unit of price movement in forex — usually the 4th decimal place (0.0001). For most pairs, 1 pip = 0.0001. For JPY pairs, 1 pip = 0.01. For gold (XAUUSD), traders often count $0.10 moves as a "pip" (broker-dependent).
What is a lot?
A lot is the trade size:
- Standard lot = 100,000 units → ~$10 per pip (on most USD pairs)
- Mini lot = 0.1 lot = 10,000 units → ~$1 per pip
- Micro lot = 0.01 lot = 1,000 units → ~$0.10 per pip
So on EURUSD, a 0.10 lot moving 20 pips = roughly $20.
Position size = the most important number
Position size is how many lots you trade. It should come from how much you're willing to risk, not a fixed habit.
The formula:
Lots = Risk amount ÷ (Stop in pips × pip value per lot)
Example: $10,000 account, risk 1% ($100), stop-loss 25 pips on EURUSD (≈$10/pip per standard lot):
Lots = 100 ÷ (25 × 10) = 0.40 lots
So you'd trade 0.40 lots — risking exactly $100 if stopped out.
Why fixed lots are dangerous
Copying a flat 0.10 lots ignores your account size and the stop distance. A wide-stop signal then risks far more than a tight-stop one. % risk sizing fixes this — it solves the formula above for you on every trade.
Let the tool do the math
TradeJournal Pro calculates position size automatically from your chosen risk and the signal's stop. There's also a free position-size calculator you can use any time.
Bottom line
Risk a small, fixed percentage per trade and let your stop distance set the lot size. That single habit separates traders who last from those who don't.
Start free · risk management docs.
Not financial advice. Trading carries risk.