Enter your balance, the percentage of it you are prepared to lose on this trade, and how far away your stop sits. The calculator returns the lot size that makes those three numbers agree.
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Position size = (account balance × risk %) ÷ (stop distance in pips × value per pip). Risking 1% of a $10,000 account with a 30-pip stop on EUR/USD gives roughly 0.33 lots, because $100 of risk divided by 30 pips is $3.33 per pip, and one pip of a standard EUR/USD lot is $10.
Every trade has three numbers that have to agree: how much money you are willing to lose, how far the price has to move against you before you accept you were wrong, and how big the position is. Fix any two and the third is determined. Position sizing is the discipline of fixing the first two, because those are the ones you can choose deliberately, and letting the lot size be whatever it has to be.
The arithmetic runs in three steps. First, convert your risk percentage into money: a 1% risk on a $10,000 account is $100. Second, find what one pip is worth for one standard lot of the instrument you are trading. $10 for a standard lot of most USD-quoted pairs, but different for yen crosses and very different for gold. Third, divide.
The reason this matters more than any entry technique is that it decouples your risk from the setup. A tight 12-pip stop and a wide 90-pip stop cost you exactly the same amount of money when they are hit, because the position sizes differ by a factor of 7.5. Without that, a run of wide-stop trades does damage that a run of tight-stop trades never would, and your equity curve stops reflecting the quality of your decisions.
The general form, valid for any instrument:
Lots = (Balance × Risk%) ÷ (Stop in pips × Pip value per lot)
Where pip value per lot is pip size × contract size, converted into your account currency. For a standard lot (100,000 units) of a pair quoted in your account currency, that is 0.0001 × 100,000 = 10. Yen pairs use a pip size of 0.01, and gold is conventionally quoted with a 0.1 pip against a 100-ounce contract, which also lands on 10 per lot.
When the pair is quoted in a currency that is not your account currency, the pip value has to be converted. If your account currency is the base of the pair, divide by the current price. If it is neither side of the pair, you need the cross rate, which is the one field this calculator asks you to supply.
You have a $5,000 account, you risk 1.5% per trade, and a signal on GBP/USD gives you an entry at 1.2700 with a stop at 1.2655.
At 0.16 lots each pip is worth $1.60, so a 45-pip stop costs $72 rather than the full $75. That gap is the rounding, and it should always fall on the safe side.
There is no universally correct number, but the arithmetic constrains the sensible range hard. At 1% per trade, ten consecutive losses cost about 9.6% of the account. At 5% per trade, the same ten losses cost 40%, and recovering from that needs a 67% gain. Ten losses in a row is not an unusual event for a strategy that wins six trades out of ten.
Most professional risk frameworks land between 0.5% and 2% per trade, with the lower end used while a strategy is unproven. Whatever you pick, the value of picking it in advance is that it removes the decision from the moment when you are looking at a chart and feeling confident.
MarketPro publishes every signal with an explicit entry, stop and take-profit precisely so this calculation is possible before you click. The risk management guide covers how to combine per-trade risk with a daily and weekly loss limit.
MarketPro ships position size, pip value, margin, profit, risk-to-reward and compounding calculators alongside the signal feed, so you can size a trade on the same screen you read it on. Download free. One vetted signal every day, no card needed.
MarketPro publishes every signal with an explicit entry, stop and take-profit levels, which is what makes these calculations possible before you click. Start with one free signal a day.
Not investment advice. Past performance is not indicative of future results.