Position size calculator
This position size calculator works out how many lots to trade so that, if your stop-loss is hit, you lose a chosen share of your account and no more. It reverses the usual beginner's habit of picking a size first and discovering the risk afterwards.
The formula
Position size (lots) = money at risk ÷ (stop distance in pips × pip value per lot)
Pip value per lot is $10 on pairs quoted in US dollars. For other pairs it depends on the current rate, which is why the calculator asks for a price, and for cross pairs a conversion rate. The pip calculator explains the conversion.
Worked example
Illustrative numbers.
- Account balance: $5,000. Risk per trade: 1.5%. Money at risk: $5,000 × 0.015 = $75.
- Pair: EUR/USD, so pip value per standard lot is $10.
- Stop-loss 30 pips from the entry. Loss per lot if hit: 30 × $10 = $300.
- Position size: $75 ÷ $300 = 0.25 lots.
If the stop had to be wider, say 60 pips, the size would halve to 0.125 lots, which most platforms would round down to 0.12. The risk in dollars stays the same; only the size changes.
How to read the result
- Round down, not up. Platforms trade in steps, usually 0.01 lots. Rounding up quietly increases your risk.
- Costs come on top. The spread, commission and any overnight financing are not included in the stop-loss amount.
- Stops are not guaranteed. In a gap or fast market the fill can be worse than your stop level, so the actual loss can exceed the plan.
- Check the margin. A correctly sized trade still needs enough margin; the margin calculator shows how much.
Many educational sources suggest risking a small single-digit percentage of an account per trade. The exact figure is a personal choice, but the principle is the same: a string of losses should dent the account, not end it. The forex entry explains stops and lots in more detail.