Position Size Calculator

How it works

Position sizing answers one question: how big can this trade be so that, if my stop-loss is hit, I lose about the amount I planned? This calculator works directly from prices rather than pips, which makes it useful across instruments with different quoting conventions.

You provide the risk amount (or a balance and a risk percentage), the entry price, the stop price, the value per point per unit and, if your account currency differs from the quote currency, a conversion rate. The calculator then divides your risk by the loss per unit.

Formula

1. Risk amount = balance × risk %
2. Stop distance = |entry − stop|
3. Loss per unit (account currency) = stop distance × value per point per unit, converted to your account currency
4. Units = risk amount ÷ loss per unit
5. Contracts (lots) = units ÷ contract size

Typical contract sizes are 100,000 units for a standard forex lot and 100 troy ounces for a standard gold lot, but these vary by broker and product.

Worked examples

All prices are illustrative.

Example 1: Gold (XAU/USD), USD account

• Balance: $20,000
• Risk: 0.5% → risk amount = $100
• Entry: 2,000.00, stop: 1,990.00
• Stop distance = 10.00 USD per ounce
• Value per point per unit = 1 (one ounce gains or loses $1 per $1 move)

Units = 100 ÷ (10.00 × 1) = 10 ounces

Contracts = 10 ÷ 100 = 0.10 standard lots

Example 2: EUR/USD, USD account

• Risk amount: $150
• Entry: 1.0850, stop: 1.0820
• Stop distance = 0.0030
• Value per point per unit = 1, quote currency already USD

Units = 150 ÷ 0.0030 = 50,000 units

Contracts = 50,000 ÷ 100,000 = 0.50 lots

As a check, the stop distance is 30 pips and 0.50 lots is worth $5 per pip, so the planned loss is 30 × $5 = $150.

Example 3: Converting the quote currency

Suppose you trade an instrument quoted in EUR but your account is in USD, with an illustrative EUR → USD rate of 1.0850. A 4.00-point stop with a value per point of 1 costs 4.00 EUR per unit, or 4.00 × 1.0850 = 4.34 USD per unit. With a $217 risk budget, you could trade 217 ÷ 4.34 = 50 units.

Tips

• Use the contract specification. Value per point and contract size come from your broker; a wrong input produces a wrong size.
• Round down to an allowed increment so you never exceed your planned risk.
• Include the spread in your thinking. Your stop is usually triggered on the bid (for longs) or the ask (for shorts), so a tight stop may be hit sooner than the chart suggests. See spread.
• Pair with a reward target. The Risk/Reward Calculator shows whether the potential gain justifies the risk.
• Check margin with the Margin Calculator before placing the order.

Risk note

A calculated position size only controls the loss you plan for. Gaps, slippage and fast markets can cause losses beyond your stop. Leveraged products such as forex and CFDs carry a high risk of losing money. Treat these results as educational estimates, not as recommendations.