How to use a Forex calculator: lot size, pips and margin before you trade
Written and fact-checked by the 1TRADER team · Updated · Read our editorial policy and about us
Before every trade you should know three numbers: how much you lose if your stop is hit, how many lots to open, and how much margin you need. You can work them out by hand, but the formulas differ by pair and instrument. The Forex calculators on this page do it in seconds.
This guide explains the formula behind each calculator, when to use it and what to watch for, with example numbers you can try in the tools above.
Quick summary
- Work out lot size from the money you are willing to lose and your stop distance, not the other way round
- For pairs ending in USD, 1 pip on 1 lot is worth $10; other pairs must be converted at the current price
- Gold XAUUSD: 1 lot = 100 oz, a $1 move = $100
- Leverage only changes the margin, not your risk per pip
BasicsWhat are lots, pips and margin?
A lot is the unit of trade size. One standard lot of a currency pair is 100,000 units of the base currency, 0.1 lot (mini) is 10,000 units and 0.01 lot (micro) is 1,000 units. A pip is the unit of price movement, usually the 4th decimal place (0.0001), except yen pairs, which use the 2nd (0.01). Margin is the money your broker holds as collateral while a trade is open.
Note Most platforms quote one more decimal than the pip (e.g. EURUSD 1.11825). The last digit is 1/10 of a pip, or a point.
Tool 01Lot size: start from the money you are willing to lose
The formula is lot size = (account balance × risk %) ÷ (stop distance in pips × value of 1 pip per lot). For example, a $1,000 account risking 1% is $10; with a 20-pip stop on EURUSD ($10 per pip per lot) you get 10 ÷ (20 × 10) = 0.05 lot, which matches the default in the lot size calculator.
Note If the result is below 0.01 lot, your stop is too wide for the money you are willing to lose. Tighten the stop or skip the trade; do not raise your risk just to take it.
Tool 02Pip value is not the same on every pair
For pairs with USD second, such as EURUSD, GBPUSD, AUDUSD and NZDUSD, 1 pip on 1 lot is always $10. For pairs with USD first, profit and loss is in another currency and must be converted back. On USDJPY, 1 pip per lot is ¥1,000, so at 150 it is 1,000 ÷ 150 ≈ $6.67. USDCHF and USDCAD use 10 units of that currency divided by the price.
Note The pip value of USD-first pairs changes with price. After a big move, recalculate in the pip and profit/loss calculator.
Tool 03Margin and leverage
Margin = lots × contract size × price ÷ leverage. For example, 0.1 lot of EURUSD at 1.1200 with 1:100 leverage uses 10,000 × 1.12 ÷ 100 = $112 of margin. Margin level = equity ÷ used margin × 100%; with a $1,000 account that is about 893%. The lower this number, the closer you are to a margin call.
Note Higher leverage uses less margin, but your loss per pip stays the same. Margin call and stop-out levels vary by broker and account type; check your account terms.
GoldGold XAUUSD: contract size and margin
One lot of gold is 100 ounces, so a $1 move makes or loses $100 per lot, or $10 per 0.1 lot. The margin for 0.1 lot of gold at $4,000 with 1:100 leverage is 10 × 4,000 ÷ 100 = $400. You can check both numbers with XAUUSD selected in the pip and margin calculators above.
Note Gold margin is often set higher than for currency pairs, and it can be raised around major news. Check the gold contract specification in your platform before you trade.
Tool 04Trading costs and rebates
Every trade costs you the spread, and some accounts also charge commission, so costs add up the more lots you trade. A rebate is cash back on lots actually traded, on winning and losing trades. The rebate calculator estimates how much you get back each month.
Note Rebates cut costs, but they will not turn a losing system into a winning one. Do not trade more just to earn more rebate.
Formulas the calculators use Standard contract size: currency pairs 100,000 units · gold 100 oz
| Calculation | Formula | Example |
|---|---|---|
| Lot size | money at risk ÷ (SL × pip value) | $10 ÷ (20 × $10) = 0.05 lot |
| Pip value (xxxUSD) | $10 × Lot | 0.1 lot = $1 per pip |
| Pip value (USDJPY) | ¥1,000 ÷ price × lots | at 150 ≈ $6.67 per lot |
| Margin | lots × contract size × price ÷ leverage | 0.1 lot EURUSD 1.12 · 1:100 = $112 |
| Gold | price move × 100 × lots | $1 move · 1 lot = $100 |
Why results may differ from your platform Check these 4 things first
Some brokers or instruments use a non-standard contract size. Check the Contract Size in the symbol specification.
Cent accounts and accounts in other currencies show different numbers from a USD account. Convert the units before you compare.
Margin and pip value on some pairs change with price, so the real numbers when you open the trade may differ slightly.
Some platforms count 1 gold pip as $0.01, others as $0.10. Looking at the price move in dollars is clearer.
Pre-trade checklist Run through it every time before you click buy or sell
- Set the money you are willing to lose per trade, e.g. 0.5–2% of your account
- Place your stop from the chart first, then calculate the lot size
- Check the margin does not take too much of your account and the margin level stays high enough
- Allow for spread and commission in your stop and target
- Check the economic calendar and market holidays; in big news or thin markets price can gap through your stop
Summary
Forex calculators tell you, before you trade, how much you are risking, how many lots to open and how much margin you need. Start with the money you are willing to lose and your stop, then use the lot size calculator, check the margin and look at the profit or loss at your target. All figures are estimates; compare them with your broker’s platform before trading for real. See risky market days in the economic calendar and market holidays. Trading involves risk; read the risk disclosure before you trade.
Source: CME Group (gold contract size 100 oz) · Actual contract size, margin and terms depend on your broker. Not investment advice.