Position size calculator
What does a position size calculator do?
A position size calculator turns a loss you are prepared to accept into a lot size, using your stop-loss distance and the value of a pip.
Position size (units) = amount at risk ÷ (stop distance in pips × USD value of one pip per unit)
Lots = units ÷ 100,000 (or ÷ 100 for gold)
Worked examples
Illustrative figures only.
- EUR/USD: balance $5,000, risk 1%, stop 20 pips. Amount at risk is $50. A pip on one lot is $10, so 20 pips cost $200 per lot, and $50 ÷ $200 = 0.25 lots.
- USD/JPY at 150.00: balance $8,000, risk 1.5%, stop 30 pips. Amount at risk is $120. A pip on one lot is ¥1,000 ÷ 150 ≈ $6.67, so 30 pips cost $200 per lot, and $120 ÷ $200 = 0.6 lots.
In both cases the stop is set first, where the trade idea would be proved wrong, and the size follows from it. Moving the stop further away to "give the trade room" means the size must shrink to keep the same risk.
How should you read the result?
The lot size shown is the largest position that keeps a loss at the stop within your chosen percentage, before costs. Providers round to their minimum step, often 0.01 lots, so round down, not up. Spreads, commissions and slippage in fast markets can make the real loss larger, so leave some margin for them.
Also check the margin the position needs with the margin calculator. A correctly sized position may still require more margin than you want to commit, especially on pairs with lower leverage caps. The pip calculator shows the pip value behind the result.
Why use a fixed percentage?
Risking a small, fixed share of your balance on each idea means a run of losses shrinks the account gradually rather than all at once. After ten consecutive 1% losses, you still have about 90% of your starting balance. The same run at 10% a trade would leave roughly a third. The exact percentage is your choice; the point is to decide it before the trade, not during it.