“Lot size -- not market direction -- determines the size of your potential loss.”
-- Ahmed Tahsin, Founder & CEO
The Direct Definition
A pip is the smallest standard unit of price movement; a lot is the unit of trade size. Pips measure how far the market moved -- the lot decides what each step of that distance is worth in dollars in your account.
“The same trade is a calculated investment at a small lot and a gamble at a large one.”
A Practical Gold Example
The move
Gold moves from $4,540.00 to $4,541.00
One standard lot
At one lot (100 oz), every $0.01 move equals $1
The result
A full $1 move in the ounce price means $100 of profit or loss
Why It Matters to You
The risk foundation
You cannot manage risk without knowing your trade's pip value
The golden rule
First decide what you accept to lose, then calculate the lot -- never the reverse
The rule in numbers
1% of the account divided by the distance to your stop loss
A simple equation
That equation is the core of loss control
The TIC Angle
That simple equation is the core of risk management in TIC's systems, with results verified on Myfxbook.
Risk notice: trading carries high risk and you may lose your capital. Past performance does not guarantee future results. Educational content only -- not investment advice.
