"Lot size" confuses more new gold traders than any other topic — and getting it wrong is the most expensive mistake in trading. This guide explains it in plain English, with the exact numbers for XAUUSD.

What a lot actually means

A lot is simply the size of your trade. For gold:

  • 1.00 standard lot = 100 ounces of gold
  • 0.10 mini lot = 10 ounces
  • 0.01 micro lot = 1 ounce

What each lot size is worth per pip

For XAUUSD, a "pip" is a 0.10 move in price (so a $1.00 move in gold = 10 pips):

  • 1.00 lot ? about $10 per pip
  • 0.10 lot ? about $1 per pip
  • 0.01 lot ? about $0.10 per pip

So if you are trading 0.10 lots and gold moves 200 pips in your favour, that is roughly $200.

Why this is the number that matters most

Imagine two traders with $1,000 accounts. Both take the same trade with a 200-pip stop-loss.

  • Trader A uses 1.00 lot. If stopped out: about $2,000 lost — the account is gone twice over.
  • Trader B uses 0.02 lots. If stopped out: about $40 lost — 4% of the account, survivable.

Same analysis. Same signal. Completely different outcome. The difference was not skill; it was position sizing.

The simple formula

Lot size = (Account × Risk %) ÷ (Stop-loss in pips × pip value per lot)

Example: $1,000 account, risking 2% ($20), with a 200-pip stop:

$20 ÷ (200 × $10) = 0.01 lots

If arithmetic under pressure is not your idea of fun, use our free position size calculator — enter your account, risk percentage and stop distance, and it gives you the exact lot size.

Rules worth keeping

1. Never choose a lot size by feel. Calculate it from your stop-loss every time. 2. Small accounts need micro lots. Under $1,000, you should mostly be trading 0.01-0.02 on gold. 3. Bigger stop = smaller lot. A wider stop is not more risk if you shrink the size to match. 4. Gold is not EURUSD. It moves far more per day, so the same lot size carries much bigger swings.

Get this one thing right and you will outlast most beginners — regardless of whose signals you follow.