How do you calculate position size?
Every market uses the same rule: position size = money at risk / loss per unit if the stop is hit. The money at risk is the most you are prepared to lose on one trade, set either as a percentage of the balance or as a fixed amount. The loss per unit comes from the distance between your entry and your stop.
With the default inputs, a $10,000 account risking 1% has $100 at risk. On EUR/USD a 20-pip stop costs $10 a pip on one standard lot, or $200 per lot, so the position is 100 / 200 = 0.50 lots. If the stop is hit, the loss is $100 before spread and commission, whatever the pair does next.
Notice what is not in the formula: how confident you feel, the leverage your broker offers, or the margin the trade ties up. Those decide whether you can open the trade, not how big it needs to be for the loss to match your plan.
Pips, lots and pip value in forex
A standard lot is 100,000 units of the base currency, the first currency in the pair. A mini lot is 10,000 units and a micro lot 1,000. A pip is 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen; the fifth decimal that many platforms show is a fractional pip, sometimes called a pipette.
Pip value per lot is the pip size times 100,000, and it is always in the quote currency, the second one in the pair:
| Pair | Pip size | Pip value, 1 standard lot | Mini lot | Micro lot |
|---|---|---|---|---|
| EUR/USD, GBP/USD, AUD/USD | 0.0001 | 10 USD | 1 USD | 0.10 USD |
| EUR/GBP | 0.0001 | 10 GBP | 1 GBP | 0.10 GBP |
| USD/JPY, EUR/JPY, GBP/JPY | 0.01 | 1,000 JPY | 100 JPY | 10 JPY |
| USD/CHF | 0.0001 | 10 CHF | 1 CHF | 0.10 CHF |
So a pip on EUR/USD is worth exactly $10 a lot to a US-dollar account, while a pip on USD/JPY is worth 1,000 yen a lot, which must be converted before you can size the trade in dollars.
What if my account is not in the pair's quote currency?
Then the pip value has to be converted, and the calculator asks you for one exchange rate: 1 unit of your account currency = how many units of the quote currency. It divides the pip value by that rate. It holds no live prices, so it never fills the rate in for you.
- Pound account, EUR/USD. If 1 GBP = 1.25 USD, a pip worth $10 a lot is worth £8. Risking £100 with a 20-pip stop gives 100 / (20 x 8) = 0.625 lots, which rounds down to 0.62.
- Dollar account, USD/JPY. Here the rate is the pair's own price. At 150 yen to the dollar, 1,000 yen is $6.67 a lot, so $100 at risk with a 30-pip stop is 0.50 lots.
- Dirham account, EUR/USD. Entering 1 AED = 0.2723 USD makes the pip value about AED 36.72 a lot. Risking AED 500 with a 25-pip stop gives 0.5446 lots, rounded to 0.54.
When the account currency already matches the quote currency, such as a pound account trading EUR/GBP, no rate is needed and the field disappears. On that pair £80 at risk with a 15-pip stop is 0.53 lots.
Position size for stocks and crypto
Shares and coins are simpler, because you enter the prices in your account currency. The size is the money at risk divided by the gap between entry and stop.
A $25,000 account risking 1% has $250 at risk. Buying at $50 with a stop at $47.50 risks $2.50 a share, so the size is 100 shares, a $5,000 position, or 20% of the balance. For crypto, a $10,000 account risking 2% has $200 at risk; with entry at 50,000 and a stop at 48,000 the loss per coin is 2,000, so the size is 0.1 coin, worth $5,000.
The calculator also shows the position's value as a share of your balance. When that figure is above 100%, the trade can only be opened with margin or leverage, and the page says so. Coins are sized to six decimal places; shares round down to whole shares.
Gold, silver and index CFDs: contract size matters
For metals and index CFDs, the loss per lot is the stop distance in price multiplied by the contract size. Gold is commonly traded at 100 troy ounces a lot and silver at 5,000 ounces, but platforms differ, and index CFDs vary even more, so choose An index or other CFD and type the contract size from your own platform's specification.
Example: a $10,000 account risking 1% on gold, with the stop 5.00 below entry. One lot loses 5 x 100 = $500 at the stop, so the size is 100 / 500 = 0.20 lots. A pound account doing the same trade at 1 GBP = 1.25 USD loses £400 a lot at the stop, so £100 of risk buys 0.25 lots.
What changes when you change the risk percentage?
The size scales in a straight line with the money at risk: double the percentage and the position doubles. What changes faster than people expect is the damage from a losing run. Starting from $10,000 and risking the same percentage of the current balance on each trade, ten losses in a row leave:
| Risk per trade | Balance after 10 straight losses |
|---|---|
| 1% | $9,043.82 |
| 2% | $8,170.73 |
| 5% | $5,987.37 |
Getting back from a loss takes a larger gain than the loss itself. After ten 2% losses, the account needs a 22.39% gain just to return to $10,000. The second chart under the calculator draws this run for whatever percentage you enter. These are arithmetic illustrations, not a view on what any trader should risk.
Why the calculator rounds down
Brokers accept sizes in steps, typically 0.01 lots in forex and whole shares in stocks. Rounding up would risk more than you set, so the calculator always rounds down: 0.625 lots becomes 0.62, and 101.6 shares becomes 101. The exact figure is shown alongside, and the working shows both. If your broker allows smaller steps, you can trade nearer the exact size.
What this calculator leaves out
It sizes the trade so the loss at the stop matches your risk, before costs. Real results differ because of the spread, commission, overnight financing or swap, and slippage. A stop is an instruction to close, not a promise of that price: in fast markets or over a weekend gap, a position can close well beyond the stop. The calculator also does not check whether your broker's margin rules allow the position. For that, see the forex margin calculator and the leverage calculator.
Common position sizing mistakes
- Using the wrong pip size on yen pairs. A USD/JPY pip is 0.01, not 0.0001.
- Mixing up lot types. 0.5 standard lots is 5 mini lots or 50 micro lots, not 0.5 mini lots.
- Skipping the currency conversion. A pound account trading USD/JPY needs the GBP to JPY rate, or the size can be wrong by a large factor.
- Sizing from the margin. The margin a trade needs says nothing about how much it can lose at the stop.
- Moving the stop after sizing. A wider stop on the same size means more money at risk than you set.
Glossary
Risk per trade: the most you plan to lose if the stop is hit. Stop loss: the price at which you plan to close a losing trade. Pip: the standard price step in forex, 0.0001 or 0.01 for yen pairs. Lot: a standard trade size; one forex lot is 100,000 units of the base currency. Quote currency: the second currency in a pair, in which its price and pip value are stated. Contract size: the units of the underlying in one CFD lot.
Frequently asked questions
How do I calculate position size in forex?
Divide the money you are willing to lose by the stop distance in pips times the pip value per lot. With $100 at risk, a 20-pip stop and $10 a pip on EUR/USD, the size is 100 / (20 x 10) = 0.50 lots.
What is the pip value of one standard lot of EUR/USD?
One pip on a standard lot of EUR/USD is worth 10 US dollars, because 0.0001 x 100,000 = 10. A mini lot is $1 a pip and a micro lot $0.10. For an account in another currency, divide by the exchange rate from that currency to US dollars.
How many lots is 1% risk on a $10,000 account?
It depends on the stop. With a 20-pip stop on EUR/USD, 1% of $10,000 is $100 and the size is 0.50 lots. With a 40-pip stop it halves to 0.25 lots, and with a 10-pip stop it doubles to 1.00 lot.
What is the difference between position size and lot size?
Position size is how much you trade, in any unit. In forex and CFDs it is usually stated in lots, so the lot size is the position size in those units. In stocks it is the number of shares, and in crypto the number of coins.
How do I calculate position size for gold (XAU/USD)?
Multiply the stop distance in price by the contract size to get the loss per lot, then divide your risk by it. With 100 ounces a lot, a 5.00 stop loses $500 a lot, so $100 of risk is 0.20 lots. Check the contract size on your platform, since it can differ.
How do I work out how many shares to buy?
Divide the money at risk by the gap between your entry and stop prices. Risking $250 with entry at $50 and a stop at $47.50, the loss is $2.50 a share, so the size is 100 shares.
Why does the calculator ask for an exchange rate?
A pip's value is set in the pair's quote currency. If your account is in another currency, the pip value must be converted before the size can be worked out. The calculator holds no live prices, so you enter today's rate from your platform.
Does the position size include spread and commission?
No. The size makes the loss at the stop equal your chosen risk before costs. Spread, commission, swap and slippage come on top, and a stop can fill beyond its price when markets move fast or gap.
What happens to my account after ten losing trades in a row?
Risking the same percentage of the current balance each time, $10,000 falls to $9,043.82 at 1% a trade, $8,170.73 at 2% and $5,987.37 at 5%. After ten 2% losses, a 22.39% gain is needed to get back to $10,000.
Can I use this position size calculator for a pound, euro or dirham account?
Yes. Choose the account currency from 24 options. Amounts are shown in that currency, and where the instrument is priced in another currency you enter the exchange rate once. Nothing is converted silently.
Courses behind position sizing
Forex Trading Beginners Online Course
Beginner forex course covering how the forex market operates, currency pairs, pips, spreads, leverage, brokers, platforms, and risk management.
See what the course coversStock Market Trading Beginners Course
Structured online beginner program covering UK, USA, and European stock markets, technical analysis, fundamental analysis, risk management, and trading psychology.
See what the course coversCrypto Trading for Beginners Online Course
Step-by-step beginner program covering cryptocurrency basics, market structure, exchanges, wallets, trading methods, and chart analysis for new traders.
See what the course coversSources and review
Last reviewed 13 November 2026 by the NIFM Academy editorial team. Next review by 13 May 2027.
- Position sizing arithmetic, size = money at risk / loss per unit at the stop, shown in the working under every result. Checked 13 November 2026.
- Forex contract conventions, standard lot of 100,000 base-currency units; pip of 0.0001, or 0.01 for yen-quoted pairs. Metal and index contract sizes vary by platform and are editable. Checked 13 November 2026.