How it works
Position sizing turns a vague intention ("I don't want to lose much on this trade") into a specific number. You decide what fraction of your account you are prepared to lose if the stop-loss is hit, measure the stop distance in pips, and let the calculator work out how many units produce that loss.
The calculator uses the same pip-value logic as our Pip Calculator, so the result is expressed in your account currency even when you trade a cross pair.
Formula
- Risk amount = account balance × risk %
- Pip value per unit (account currency) = pip size, converted from the quote currency into your account currency
- Position units = risk amount ÷ (stop distance in pips × pip value per unit)
- Lots = units ÷ 100,000
Pip size is 0.0001 for most pairs and 0.01 when the quote currency is JPY. The conversion follows the usual rule: no change if your account currency is the quote currency, divide by the pair price if it is the base currency, otherwise multiply by the quote → account rate.
Worked examples
All prices are illustrative.
Example 1: EUR/USD, USD account
- Balance: $10,000
- Risk: 1% → risk amount = $100
- Stop-loss: 25 pips
- Pip value per unit = 0.0001 USD (quote currency is USD)
Units = 100 ÷ (25 × 0.0001) = 100 ÷ 0.0025 = 40,000 units
Lots = 40,000 ÷ 100,000 = 0.40 lots
If the stop is hit, the loss is 25 pips × $4 per pip = $100, as intended.
Example 2: GBP/JPY, USD account
- Balance: $5,000
- Risk: 2% → risk amount = $100
- Stop-loss: 40 pips
- Assume USD/JPY is quoted at 150.00, so 1 JPY = 1 ÷ 150 USD
Pip value per unit in JPY = 0.01. Converted to USD: 0.01 ÷ 150 = 0.0000667 USD (rounded).
Units = 100 ÷ (40 × 0.01 ÷ 150) = 100 ÷ 0.0026667 = 37,500 units
Lots = 0.375, which you would round down to 0.37 lots if your broker trades in 0.01-lot steps. At 0.37 lots the loss at the stop would be about $98.67.
Tips
- Set the stop first, then the size. Place your stop where the trade idea is proven wrong, then let the size adjust. Moving the stop to fit a preferred lot size defeats the purpose.
- Round down, not up. Rounding up quietly increases your risk.
- Remember correlated trades. Two positions in EUR/USD and GBP/USD can behave like one bigger trade. See currency correlation.
- Check margin. A correctly risk-sized trade may still need more margin than you have; confirm with the Margin Calculator.
- Learn the background in Basic risk management.
Risk note
Fixed-percentage sizing limits the planned loss per trade, but it cannot prevent losses. Prices can gap through stop-loss levels, especially around news or over weekends, which can make the actual loss larger than calculated. Forex trading with leverage carries substantial risk. This calculator is for education and planning only and is not personal advice.
Frequently asked questions
What percentage of my account should I risk per trade?
There is no single correct figure. Many educational sources use 1–2% as an illustration, but the right amount depends on your goals, experience and tolerance for losses. Lower risk means smaller drawdowns.
Why is my lot size an odd number like 0.37?
The calculation is exact, but brokers only accept certain increments, often 0.01 lots. Rounding down to the nearest allowed size keeps your risk at or below your target.
Does the calculator include spread and commission?
No. It sizes the position from the stop distance alone. Spread, commission and slippage can make the real loss slightly larger, so some traders leave a small buffer.
What is the difference between this and the Position Size Calculator?
This tool works in pips and lots for forex pairs. The Position Size Calculator works from entry and stop prices and supports other instruments such as gold, with a configurable contract size.
Do I need a stop-loss to use this calculator?
Yes. The stop distance defines how much you lose if the trade goes against you, so without it there is no way to link position size to a fixed risk amount.
Guide last reviewed .