What Is PNL in Trading? MT5 Lot Size Guide

You opened a trade in MetaTrader 5 (MT5), a trading platform available through most forex and CFD brokers, and noticed a number in the Profit column that keeps moving. You don't know if that's good news or bad. After reading this guide, you will be able to calculate your expected gain or loss before placing any position, read your terminal with confidence, and choose a lot size that fits your account.

What Is PNL in Trading?

PNL stands for Profit and Loss. In trading, it measures the net financial result of a trade: how much money you made or lost between the price at which you entered and the price at which you exited. A positive PNL means the trade gained. A negative PNL means it lost. PNL encompasses both outcomes; the sign tells you which one applies.

In forex trading, PNL refers to the financial result of speculating on currency pair price movements. When you trade a pair such as EUR/USD, you take a position on whether the base currency (EUR) will rise or fall against the quote currency (USD). In EUR/USD, EUR is the base currency and USD is the quote currency, so your PNL with a USD account is calculated in US dollars. The price difference between your entry and exit, multiplied by your lot size, produces your PNL figure.

PNL exists in two states: unrealized while a trade is open, and realized once it closes. The number fluctuating in your MT5 terminal while a position is live is unrealized PNL. The number that gets added to your account permanently after you close is realized PNL. Before examining lot sizes, there is one distinction about these two states that beginners consistently miss.

Realized vs. Unrealized PNL: What's the Difference?

Unrealized PNL, also called floating PNL or shown as Floating P/L in MT5, is the live profit or loss on an open position. It changes every second as price moves. Realized PNL is the profit or loss that locks in when you close the trade. Once realized, it no longer changes and is permanently reflected in your account balance. For more background on why your closed PNL can differ from your floating profit, the linked resource covers the mechanics in depth.

The table below compares the two types:

Your equity is your account balance plus your current unrealized PNL: Equity = Balance + Floating PNL. Your balance only changes when a trade closes.

Here is a concrete scenario. You buy 0.1 lot EUR/USD at 1.1000. Price moves to 1.1010, a gain of 10 pips. Your unrealized PNL is +$1.00, shown in green in your Profit column. Close the trade and it becomes realized PNL of +$1.00. Your balance increases by $1.00, and the position moves from the Trade tab to the History tab. If you hold overnight, MT5 may apply a swap charge or credit, visible in the Swap column of the Terminal window.

Now that you understand what PNL measures, the question is what controls how large those numbers get. The answer is your lot size.

What Is Lot Size in MT5?

Lot size in MT5 is the number you enter in the volume field of the New Order dialog. It sets the trade volume and directly determines the scale of your PNL. In forex trading, a lot is the standardized unit of trade volume. 1 standard lot in MT5 = 100,000 units of the base currency.

The minimum lot size in MT5 is typically 0.01, though some brokers support nano lots of 0.001. Confirm with your broker's instrument specifications.

The Four Lot Size Types

MT5 supports four lot size types, each mapping to a specific value in the volume field:

• Standard lot: 1.0 in the volume field
• Mini lot: 0.1 in the volume field
• Micro lot: 0.01 in the volume field (recommended for beginners)
• Nano lot: 0.001 in the volume field (availability varies by broker)

The table below shows each lot type, its MT5 volume field value, the number of units it represents, its pip value on EUR/USD with a USD account, and how much a 10-pip move would change your PNL:

Values shown for EUR/USD with a USD-denominated account. Contract sizes differ for non-forex CFD instruments.

The value 0.01 in MT5's volume field equals one micro lot, representing 1,000 units of the base currency. For EUR/USD, each 1-pip price movement produces a $0.10 change in your PNL. The value 1.0, one standard lot, equals 100,000 units. Each pip movement at 1.0 lot is worth $10.00, making it unsuited for accounts under $10,000 without careful risk management.

Contract size is the fixed multiplier behind these figures. For forex in MT5, the contract size is always 100,000 units per standard lot. Your actual trade volume equals Lot Size multiplied by Contract Size. For a 0.1 lot trade: 0.1 x 100,000 = 10,000 units traded. Non-forex instruments use different contract sizes. All order types in MT5, including market orders and pending orders, use the same volume field to set your lot size.

To understand how lot size translates into dollar gains or losses, you need to know what a pip is worth.

What Is a Pip and How It Connects to PNL

A pip (percentage in point) is the smallest standard price movement for a currency pair. For most pairs, including EUR/USD, GBP/USD, and USD/CHF, one pip equals a price move of 0.0001. For JPY pairs such as USD/JPY, one pip equals 0.01.

Pip value is the dollar amount each pip movement adds to or subtracts from your PNL. The underlying formula is:

Pip Value = (Pip Size / Exchange Rate) x Lot Size x Contract Size

For EUR/USD at an exchange rate near 1.10: (0.0001 / 1.10) x 1.0 x 100,000 = approximately $9.09 per pip, rounded to $10.00 for practical use. Pip value scales directly with lot size.

For EUR/USD with a USD account, pip value by lot type is:

For pairs where USD is the base currency (e.g., USD/JPY), pip value calculation differs. Verify with your broker's pip value tool.

With a 0.1 mini lot on EUR/USD, 1 pip equals $1.00. With 1.0 standard lot, 1 pip equals $10.00. These pip values feed directly into the PNL formula.

How to Calculate PNL in MT5

PNL calculation follows a formula with two equivalent expressions.

The PNL Formula

PNL = Number of Pips x Pip Value per Lot x Number of Lots

Equivalently:

PNL = (Exit Price - Entry Price) / Pip Size x Lot Size x Contract Size

Where: Contract Size for forex = 100,000 units per standard lot

The first expression works for quick mental math. The second shows the full derivation connecting price movement, lot size, and contract size.

Worked Examples: Calculating PNL for Different Lot Sizes

The following examples use EUR/USD with a USD account and a 20-pip price movement to show how lot size changes the dollar outcome.

Example 1: Micro lot (0.01)

You buy 0.01 lot EUR/USD at 1.1000. Price moves to 1.1020, a gain of 20 pips. You close the trade.

• Step 1: Pip movement = (1.1020 - 1.1000) / 0.0001 = 20 pips
• Step 2: Pip value for 0.01 lot = $0.10 per pip
• Step 3: PNL = 20 x $0.10 = +$2.00

Your Profit column in the Terminal window shows +2.00 before you close.

Example 2: Mini lot (0.1)

Same entry, same 20-pip move, but 0.1 entered in the volume field. Ten times the lot size, ten times the result.

• PNL = 20 x $1.00 = +$20.00

Example 3: Standard lot (1.0)

Same entry, same 20-pip move, but 1.0 entered in the volume field.

• PNL = 20 x $10.00 = +$200.00

The pip movement was identical across all three examples. Only the lot size changed. Each 10x increase in lot size produced a 10x increase in PNL. If price had moved 20 pips against you, these figures would appear as negative: -$2.00, -$20.00, and -$200.00.

Bonus example: JPY pair

JPY pairs use a different pip convention. You sell 0.1 lot USD/JPY at 150.00. Price falls to 149.80, a gain of 20 pips (each pip = 0.01 on JPY pairs). Pip value for 0.1 lot USD/JPY at current rates is approximately $0.67 per pip. PNL = 20 x $0.67 = approximately +$13.40. The exact figure varies with the exchange rate at time of calculation.

How Lot Size Affects Your PNL: Side-by-Side Comparison

Lot size and PNL are directly proportional. Double your lot size and you double your profit or loss per pip, with no change to the market, the pair, or the entry price.

A 20-pip move on EUR/USD produces $2.00 at 0.01 lot, $20.00 at 0.1 lot, and $200.00 at 1.0 lot. In MT5, this difference appears immediately in the volume field of your New Order dialog. Enter 0.01 and your Profit column reflects $0.10 per pip. Enter 1.0 and every pip of movement becomes $10.00 in your terminal, in either direction.

A larger lot size does not improve your odds of the price moving in your favor. It only raises what you stand to gain or lose on a result you cannot control.

How to Set Lot Size When Placing a Trade in MT5

When opening a trade in MT5, you set your lot size in the volume field of the New Order dialog.

1. Open the New Order dialog. Press F9 on your keyboard, or right-click on any chart and select Trade, then New Order.
2. Locate the Volume field. This is the lot size input. It defaults to a value set by your broker, often 0.01 or 0.1.
3. Enter your desired lot size. Click the Volume field and type your value: 0.01, 0.1, or 1.0. Some MT5 interfaces show up/down arrows to increment the value.
4. Set your stop loss and take profit levels. Enter your stop loss (SL) as an absolute price level in the SL field, not as a pip distance. A take profit (TP) sets the exit price for your profit target.
5. Confirm and execute. Click Buy or Sell to place the trade. Your lot size is locked in for that position.

You cannot change the lot size of an open position in MT5. The volume is fixed at the moment of execution.

Reading PNL in the MT5 Terminal Window

Your PNL is shown in the Terminal window. Press Ctrl+T to open it, then select the Trade tab. The Profit column shows your current unrealized PNL for each open position.

The Profit column updates tick by tick as the market moves. Green figures indicate a currently profitable position. Red figures indicate a position at a loss. This value is not yet in your balance. It only becomes real when you close the trade, at which point it moves to the History tab as realized PNL.

At the bottom of the Trade tab, MT5 displays five key metrics: Balance, Equity, Margin, Free Margin, and Margin Level. Equity equals Balance plus Floating PNL and changes every second while trades are open. Your balance only updates when a trade closes. The Profit column may be labeled "Profit" or "Profit/Loss" depending on your broker's MT5 configuration. The function is identical.

There is one thing that confuses almost every beginner the first time they open a trade.

Why Is My PNL Negative When I First Open a Trade?

This is completely normal and not an error.

The moment you open a buy trade in MT5, your PNL shows a small negative number. The cause is the bid/ask spread, the difference between the buy price (Ask) and the sell price (Bid). When you buy, your entry is at the Ask price. If you closed the trade immediately, you would exit at the Bid price, which is lower by the spread amount. For a detailed explanation of how bid/ask spreads work in MT5 trading, the linked resource covers spread mechanics specifically.

For example, if EUR/USD has a spread of 2 pips and you trade 0.1 lot, your trade opens at approximately -$0.20 PNL. As price moves 2 pips in your favor, your PNL reaches $0.00. Any further favorable movement produces positive PNL.

A second scenario also causes confusion. If you opened a short (sell) position while price moved upward, your PNL is negative because the trade is moving against you. That is not a platform error. It is the market outcome of your trade direction.

Understanding why your PNL opens negative resolves the first concern most beginners face. The next step is choosing a lot size that keeps those potential swings within safe limits.

How to Choose the Right Lot Size: Risk Management Basics

The 1% Rule: Calculating Your Lot Size Based on Risk

The 1% rule, the principle that you risk no more than 1% of your account balance on any single trade, is the most widely used starting point for lot size decisions among experienced traders.

A stop loss (SL) is an instruction to automatically close your trade if price moves against you by a set amount, capping your maximum loss. The combination of your lot size and your stop loss distance in pips determines your maximum possible loss on any single trade. In MT5, you set the SL as an absolute price level in the New Order dialog, not as a pip distance. A take profit (TP) works the same way in reverse, closing the trade when your profit target is reached. For a practical walkthrough of how stop loss and take profit orders function in trading, the linked resource provides step-by-step guidance.

To find the right lot size for your account, follow these four steps:

1. Determine your risk in dollars. Multiply your account balance by your chosen risk percentage. Example: $500 account x 1% = $5 maximum loss per trade.
2. Determine your pip risk. Decide your stop loss distance in pips. Example: 20-pip stop loss.
3. Calculate the pip value you need. Divide dollar risk by pip risk: $5 / 20 pips = $0.25 per pip.
4. Find your lot size. Divide your required pip value by the pip value per standard lot: $0.25 / $10.00 = 0.025 lot. Round down to 0.02 lot.

For a $100 account risking 1%, your maximum loss equals $1. With a 20-pip stop: $1 / 20 = $0.05 per pip needed. At $0.10 per pip for a micro lot (0.01), even the smallest available lot size slightly exceeds 1% risk on this stop distance. Consider a tighter stop or start on a demo account (a practice account that uses virtual money and real market prices).

A series of losing trades reduces your balance progressively. This cumulative decline is called drawdown, and keeping lot sizes small is the primary tool for limiting how fast it compounds.

You do not have to run this calculation manually every time. A position size calculator takes your account balance, risk percentage, and stop loss distance as inputs and returns the correct lot size.

How Leverage Affects Your Lot Size Choices

Leverage allows you to control a larger position than your account balance would otherwise permit. With 1:100 leverage, for example, a $100 account can control a $10,000 position, equivalent to 0.1 lot on EUR/USD. Margin is the amount MT5 sets aside as collateral for the trade. Leverage ratios vary by broker and are subject to regulatory limits in some regions.

Leverage affects which lot sizes you can access with your account balance, but it does not change your PNL per pip. That is determined solely by your lot size. Trading 1.0 standard lot on a $500 account means each pip movement equals $10.00. A 50-pip adverse move equals $500, your entire account. Start small and increase lot size only as your account and experience grow. If your losses reduce equity below the required margin level, MT5 may close your positions automatically.

Frequently Asked Questions

What Is PNL in Trading?

PNL stands for Profit and Loss. It measures the net financial result of a trade: how much money you made or lost. A positive PNL means the trade gained value. A negative PNL means it lost value. PNL encompasses both outcomes; the sign tells you which one applies. In forex, PNL is calculated from the price difference between your entry and exit, scaled by your lot size.

What Is the Difference Between Realized and Unrealized PNL?

Unrealized PNL, also called floating PNL, is the live profit or loss on an open position. It changes continuously as price moves and appears in the Profit column of the MT5 Trade tab. Realized PNL is the profit or loss locked in when you close the trade. Once realized, it no longer changes and is permanently reflected in your account balance, visible in the History tab.

What Is Lot Size in MT5?

Lot size in MT5 is the trade volume you enter in the volume field of the New Order dialog. It determines how many units of the base currency you are trading. A larger lot size means larger gains or losses per pip. The four lot types are standard (1.0), mini (0.1), micro (0.01), and nano (0.001, where available from your broker).

How Many Units Is 1 Lot in MT5?

One standard lot in MT5 equals 100,000 units of the base currency. For EUR/USD, that means you are trading 100,000 euros. Each pip movement on a standard lot is worth approximately $10.00 for a USD account. A mini lot (0.1) equals 10,000 units at $1.00 per pip. A micro lot (0.01) equals 1,000 units at $0.10 per pip.

How Does Lot Size Affect Profit and Loss?

Lot size and PNL are directly proportional. Each increase in lot size produces a proportional increase in gains or losses per pip. On EUR/USD with a USD account: 0.01 lot = $0.10 per pip, 0.1 lot = $1.00 per pip, 1.0 lot = $10.00 per pip. Doubling your lot size doubles your profit or loss on every pip of price movement.

What Does Equity Mean in MT5?

In MT5, equity equals your account balance plus your current unrealized PNL. The formula is Equity = Balance + Floating PNL. While trades are open, equity changes every second as the market moves. When all trades are closed, equity equals your balance. Equity is displayed in real time at the bottom of the Terminal window's Trade tab alongside Balance, Margin, Free Margin, and Margin Level.

Why Is My PNL Negative When Price Goes Up?

Two causes are possible. First, your PNL starts slightly negative the moment you open any trade because of the spread, the gap between the buy price (Ask) and sell price (Bid). This is normal and resolves as price moves in your favor. Second, if you opened a sell (short) position, price moving up means the market is moving against your trade direction, which produces a negative PNL.

What Is the Best Lot Size for Beginners?

For most beginners, a micro lot (0.01) is the recommended starting lot size. On EUR/USD with a USD account, each pip movement changes your PNL by only $0.10, making it practical for small accounts and keeping losses manageable while you learn. Always pair your lot size with a stop loss so your maximum possible loss per trade is defined before you enter the position.

Conclusion

PNL is the financial result of every trade you place, and your lot size is the single input that controls how large that result can be. Unrealized PNL fluctuates while a position is open; realized PNL is permanent once you close. The 1% rule and a defined stop loss give you a consistent method for sizing each trade before you enter.

Start with a micro lot (0.01) on a demo account to observe how lot size affects your Profit column in real time, without financial risk. MT5 demo accounts replicate live market conditions with virtual money, so every concept in this guide translates directly to what you see on screen.

Trading financial instruments involves significant risk of loss and may not be suitable for all investors. The information in this article is provided for educational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always ensure you understand the risks involved before trading and consider seeking independent financial advice if necessary.