Position Size Calculator
The most important calculation in trading. Size every position by the risk you're willing to take — not by gut feel.
This risks USD 100.00 (1.00% of the account) over a 20-pip stop — before spread, slippage and broker-specific contract differences.
Position sizing is the single most important risk decision a trader makes. This calculator works out how large a position to take based on your account balance, the percentage you're willing to risk, and your stop-loss distance — so your risk stays constant trade to trade.
When to use this tool
- Before every trade, to convert your risk percentage and stop into a precise lot size.
- When your stop distance changes, since the correct size changes with it.
- While planning a prop challenge, to keep each trade inside the firm’s limits.
How the calculation works
The calculator fixes your risk first, then derives the size. Your risk amount is a percentage of your balance; dividing that by your stop distance and the value per pip gives the position size.
Risk amount = balance × risk % Value per pip = risk amount ÷ stop distance (pips) Position size = value per pip ÷ pip value per lot
Because the size adapts to your stop, a wider stop produces a smaller position and a tighter stop a larger one — keeping the money you risk the same every time.
Practical example
On a $10,000 account risking 1% ($100) with a 20-pip stop on EUR/USD, you can afford $5 per pip. At about $10 per pip per standard lot, that's a 0.5 lot position. Tighten the stop to 10 pips and the position doubles to 1.0 lot — but the risk stays $100.
Common mistakes
- Sizing by conviction or gut feel instead of a fixed risk percentage.
- Placing the stop to fit a desired position size, rather than where the trade is actually invalidated.
- Risking too much per trade, so a normal losing streak causes a deep, hard-to-recover drawdown.
Frequently asked questions
How do I calculate position size?
Decide your risk amount (a small fixed percentage of your account), then divide it by your stop-loss distance and the value per pip. This calculator does it for you across forex, gold and indices.
How much should I risk per trade?
Many risk-conscious traders cap risk at roughly 0.5%–1% per trade, so no single trade or short losing streak does serious damage. The exact figure is personal, but small and consistent is the principle.
Should my position size change between trades?
The risk percentage stays constant; the position size varies because it adapts to each trade’s stop distance. Wider stops mean smaller positions, tighter stops larger ones — same risk in money terms.
Why might the result differ from my broker?
Pip values here are educational estimates that don’t use live exchange rates or your broker’s exact contract specs. Always confirm the final size on your platform before trading.
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