Position sizing means deciding how large a trade should be before you open it. The size is set so that the loss at your stop-loss matches an amount you have already chosen to risk. It does not depend on how confident you feel about the trade.
Fill in the empty fields to see the result.
Rounded down to 0.01 lot so the risk never exceeds your limit.
The calculator above works out the lot size from your balance, your risk per trade and your stop distance. The sections below explain what goes into it, so you can check the result and use it on any instrument.
The lot size formula
Lots = risk money / (stop in pips × pip value per lot)
The terms:
- Lot: the unit of trade size. A standard lot, a mini lot and a micro lot are fixed fractions of each other. The exact contract size for each symbol is in its specification.
- Risk money: the amount in your account currency that you accept to lose if the stop-loss is hit. It is usually a small share of the balance. The guide on risk per trade covers how traders choose this share.
- Stop in pips: the distance from your entry price to your stop-loss. A pip is the standard unit of price movement for a pair. On most pairs it is the fourth decimal place. On yen pairs it is the second.
- Pip value per lot: how much money a move of a single pip is worth for a standard lot, in your account currency.
You multiply the stop distance by the pip value to get the loss per lot at the stop. You then divide your risk money by that loss per lot. The result is the number of lots that loses your planned amount at the stop, before costs.
The stop comes first. You place it where the trade idea is proven wrong, and the lot size follows from it. Do not move the stop closer just to fit a bigger lot. See stop loss placement.
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How to calculate lot size step by step
- Write down your balance, or your equity if you have open trades.
- Choose your risk money for this trade.
- Decide your entry and stop-loss prices, and measure the distance in pips or points.
- Find the pip value or point value per lot for the symbol in your account currency.
- Put the numbers into the formula or the calculator.
- Round the result down to the lot step your account allows.
- Check that the margin required fits your account. See avoiding margin calls.
Rounding down keeps the real risk at or below your plan. Rounding up adds risk you did not choose.
Position sizing in forex
On a pair where the quote currency matches your account currency, for example EURUSD in a USD account, the pip value per lot is fixed. On other pairs the pip value changes with the exchange rate, because it has to be converted into your account currency.
Example workflow for EURUSD:
- You pick your risk money and a stop below a recent swing low.
- You measure the stop distance in pips.
- You enter the balance, risk and stop in the calculator.
- The calculator returns the lot size, and you round it down to the lot step.
On a cross pair or a yen pair, the same steps apply. The pip value is different, so the same stop distance gives a different lot size. That is why a fixed lot on every pair gives an uneven risk from trade to trade. The page on fixed fractional vs fixed lot compares both approaches.
If your account is in PKR or another currency, the conversion matters even more. Check the pip value the platform or calculator shows in your own account currency.
Position sizing for gold (XAUUSD)
Gold is quoted in dollars per ounce. Brokers define a "pip" or "point" on XAUUSD in different ways, so a stop that looks small in points can be a large price move.
To size a gold trade:
- Open the symbol specification in MT4 or MT5 (right-click the symbol in Market Watch and choose Specification) and note the contract size and tick size.
- Measure your stop as a price distance in dollars, not in "pips" taken from a forum post.
- Work out the money value of that distance for a standard lot, or let the calculator do it.
- Divide your risk money by that value.
Gold often moves sharply around news. Spreads can widen too, so the real loss can be larger than the distance you measured. See XAUUSD spread and trading news risks.
Position sizing for indices
For index CFDs such as US100 or NAS100, price moves in index points. The money value of a point per lot depends on the contract size, which differs between symbols and providers.
- Read the contract size and point value from the symbol specification.
- Measure your stop in index points.
- Use the formula with "points" in place of "pips".
Indices can gap at the open and over weekends. A stop-loss does not guarantee your exit price in a gap. Read gap and weekend risk before holding index positions over a closed market.
Small accounts
With a small balance, the risk money is small, so the formula can give a lot size below the minimum lot the account allows. You then have these choices:
- Skip the trade. If the minimum lot risks more than your plan at the stop you need, the trade does not fit your account.
- Use a smaller contract. Cent-type accounts quote balances in cents, which allows smaller position sizes. See Standard Cent account.
- Look for a setup with a closer logical stop, but only if the chart supports it. Do not squeeze the stop to fit.
Do not open the minimum lot and "hope" the stop is not hit. That raises your real risk per trade, and a run of losses then takes a larger share of the account. See drawdown and risk of ruin.
Costs and things the formula leaves out
The basic formula covers the loss from price moving to your stop. It does not include:
- Spread: the gap between bid and ask prices. You pay it on entry.
- Commission, on accounts that charge it.
- Swap: the overnight financing charge or credit. See swap fees.
- Slippage: filling at a worse price than requested, common in fast markets.
Some traders cut their risk money slightly to leave room for these costs.
Volatility-based stops
If you set stops using the Average True Range (ATR), a measure of how far a price typically moves, your stop distance changes with the market. The lot size changes with it. When the market is calm, the stop is tighter and the lot is larger. When it is volatile, the stop is wider and the lot is smaller. See ATR position sizing.
Risk note
Correct position sizing controls how much you lose when a stop is hit. It does not make a strategy profitable and does not prevent losses. Leveraged forex and CFD trading can lose money fast, and gaps or slippage can make a loss larger than planned. Several open trades on related instruments add up to a larger combined risk. See correlation risk.
On the legal side: per the SECP, offshore platforms have no Pakistani licence or oversight and offer no legal protection or recourse. Read regulation and safety before you open any account.
More tools are on the calculators page. To build sizing into a full set of rules, see your personal risk plan.
Frequent questions
What is a position size calculator?
It is a tool that turns your balance, your risk per trade and your stop distance into a lot size. The lot calculator on this page does this for you.
How do I calculate lot size without a calculator?
Divide your risk money by the stop distance in pips multiplied by the pip value per lot. Then round the result down to your account's lot step.
Does a wider stop mean more risk?
Not if you size correctly. A wider stop gives a smaller lot, so the money at risk stays the same.
Why does the same stop give different lot sizes on different pairs?
The pip value differs between pairs and depends on your account currency, so the loss per lot at the stop changes.
Is position sizing the same for gold and indices?
The formula is the same. You measure the stop in price or index points and use the value per point from the symbol specification.
Can position sizing guarantee I won't lose my account?
No. It limits the planned loss per trade, but losing runs, gaps, slippage and leverage can still cause large losses.