Each FX dealer has different account minimums and position sizes. The standard trade or “lot” size is100,000 of the base currency; “mini” lots consist of 10,000 units of the base currency. One pip equals 10 currency units of a standard lot and one unit of a mini lot.

For example, one USD/CHF lot costs 100,000 U.S. dollars, but one EUR/USD lot equals 100,000euros. A $10,000 account with 10 percent margin can either trade one standard lot or up to 10 mini lots. If you buy one USD/CHF standard lot at 1.2759 and it climbs to 1.2799, your profit is $400 (40 pips, or 0.0040 * $10,000).

However, if USD/CHF falls to 1.2259, this 500-pip ($5,000) loss may trigger a margin call because most firms require that your account’s value (cash plus unrealized gains or losses) cover at least half the margin of all open positions.

The firm then automatically exits the trade before you lose more than your initial margin can cover.