Position Size Calculator: Risk the Right Amount on Every Trade

Position sizing determines how many lots (or units) you should trade based on your account size, risk tolerance, and stop loss distance. It's the most important calculation you'll make on every single trade.

Why Position Sizing Matters

Without proper position sizing:

• You might risk 10% on one trade and 0.5% on another — inconsistent results.
• A string of losses can wipe out your account.
• You can't accurately measure your strategy's performance.

With proper position sizing:

• Every trade risks the same percentage of your account.
• You can survive losing streaks.
• Your results are statistically meaningful.

The Position Size Formula

Position Size = (Account Risk $) / (Stop Loss Pips × Pip Value)

Step-by-Step Example

Given:

• Account Balance: $10,000
• Risk Per Trade: 1% = $100
• Pair: EUR/USD
• Stop Loss: 50 pips
• Pip Value (Standard Lot): $10/pip

Calculation:

• Position Size = $100 / (50 × $10) = 0.20 lots (2 mini lots)

Another Example

Given:

• Account Balance: $5,000
• Risk Per Trade: 2% = $100
• Pair: GBP/USD
• Stop Loss: 30 pips

Calculation:

• Position Size = $100 / (30 × $10) = 0.33 lots (3.3 mini lots)

Try Our Calculator

Use the interactive calculator below to quickly determine your position size for any trade:

Common Risk Percentages

Position Sizing Rules

Rule 1: Never Risk More Than 2% Per Trade

Even the best strategies have losing streaks of 5-10 trades. At 2% risk per trade, 10 consecutive losses = 18% drawdown (survivable). At 10% risk per trade, 10 losses = 65% drawdown (account-ending).

Rule 2: Adjust for Volatility

• Volatile pairs (GBP/JPY): Use wider stops → smaller position sizes.
• Calm pairs (EUR/CHF): Use tighter stops → larger position sizes.

Rule 3: Account for Correlation

If you have two open trades on positively correlated pairs (EUR/USD and GBP/USD), your total risk is effectively doubled. Reduce each position size accordingly.

Rule 4: Recalculate After Wins and Losses

• After a big win, your account is larger → your risk amount increases → you can trade slightly larger.
• After losses, your account is smaller → your risk amount decreases → you trade smaller.

This naturally scales your trading and protects your capital.

The Bottom Line

Position sizing isn't glamorous, but it's the difference between traders who survive and those who don't. Calculate it for every single trade — no exceptions.