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Position size calculator

How many lots to trade so that being stopped out costs exactly what you decided it would, and not a pound more.

This is the calculation that decides whether an account survives a losing streak, and it is the one most reliably skipped.

The order matters: risk first, stop second, size last. Choosing a size and then placing a stop to justify it is the same arithmetic run backwards, and it produces a different answer every time.

account ccy
%

1% is a common limit. At 1%, ten losses in a row costs under 10% of the account.

pips

Where the idea is wrong, not where the loss becomes comfortable.

account ccy

From the pip value calculator. About 10 for a pair quoted in your account currency.

Position size0.4 lots
Amount at risk
$100.00
Units of base currency
40,000
Cost per lot if stopped
$250.00

A model, not a quote. Every figure here comes from what a broker publishes or what you type, and real fills, spreads and rates move.

The formula

Risk amount
account balance × risk %
Risk per lot
stop in pips × pip value per lot
Position size
risk amount ÷ risk per lot

How to use it

  1. Decide what a loss costs, as a percentageBefore looking at the chart. A figure chosen while a setup is in front of you is a figure chosen by the setup.
  2. Find where the idea is wrongThe stop belongs at the price that would tell you the trade was a mistake: a level, a structure break, a volatility band. Not at a round number, and not at the distance that makes the position size you wanted work.
  3. Get the pip value for that pairIt is not $10 on everything. Yen pairs and cross-rates differ, and a wrong pip value scales the whole answer.
  4. Take the size the arithmetic gives youIf it comes out smaller than feels worth trading, the honest options are a tighter stop or no trade. Rounding it up is how a 1% rule becomes a 3% rule without anyone deciding to change it.

The same risk, two different stops

A $10,000 account risking 1% has $100 on the line. With a 25-pip stop on a pair worth $10 a pip, each lot risks $250, so the position is 0.40 lots.

Widen the stop to 80 pips (because volatility rose, or because the level that invalidates the idea is further away) and each lot now risks $800. The position falls to 0.125 lots.

Both trades risk $100. The second is a third of the size, and keeping it at 0.40 would have risked $320 instead: a 1% rule quietly running at 3.2%.

The stop is a level, not a guarantee

This works out the loss if the stop fills where you put it. In a gap or a fast market it fills where the next price is, and that can be materially worse.

Position sizing controls planned risk. It does not control slippage, and it does not survive a weekend gap on an oversized position.

Common questions

What percentage should I risk?

There is no universal figure. The useful test is whether ten consecutive losses at your chosen size leaves an account you can still work with. At 1% that is under 10%, at 5% it is 40%.

Does 1% risk mean I only put in 1% of my account?

No. It means the planned loss is about 1%. The position controlling that risk is usually far larger, because the stop distance rather than the position size defines the loss.

What if the answer is smaller than the minimum lot size?

Then the trade is too big for the account at that stop distance. Either the stop needs to be tighter for a good reason, or this is not a trade you can take at this account size.

Should I round up or down?

Down. Rounding up is a decision to exceed the limit you just set, taken by arithmetic rather than by you.

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