Position size calculator

First find the amount you accept to lose on the trade: balance times risk percentage. Then divide it by the stop distance and the pip value of one lot. The formula: lots = risk amount ÷ (stop distance × pip value per lot).

Example: your account is 5,000 dollars and you risk 1 percent per trade, so 50 dollars. On EUR/USD the stop is 40 pips away and one pip on a standard lot is 10 dollars. 50 ÷ (40 × 10) = 0.125 lots. Platforms work in steps of 0.01, so you open 0.12 lots; if the stop is hit you lose 48 dollars.

With an 80-pip stop on the same account the size halves to 0.06 lots. The money you lose stays around 50 dollars. The stop sets the size: the wider the stop, the smaller the position, and the risk stays the same.

Pip value is created in the pair's second currency. On markets quoted in dollars, such as EUR/USD, GBP/USD and gold, the pip value on a dollar account is fixed: 10 dollars per lot. On USD/JPY the pip is in yen, and converting it to dollars needs the rate. At 150, one pip on one lot is worth 6.67 dollars.

On EUR/GBP one pip on one lot is 10 pounds. On a dollar account it is converted at the GBP/USD rate: at 1.25 that is 12.50 dollars. That is why the calculator asks for a price or rate for some pair and account combinations. We don't pull live prices; type the price you see on your platform, a few pips of difference barely changes the result.

One standard lot is 100 ounces of gold or 5,000 ounces of silver. The pip definition for gold differs between platforms: most count a 0.10-dollar move as a pip, some count 0.01. You can choose either in the calculator.

The way to avoid confusion is to think of the stop as a price difference. If entry and stop are 5 dollars apart, that is 50 pips under the 0.10 definition and 500 pips under 0.01. Enter either with the right definition and the lot size is the same; enter it with the wrong one and the size is off by ten times.

The common rule is 0.5 to 2 percent per trade. The logic is simple: ten losses in a row at 1 percent cost about 10 percent of the account, at 10 percent they cost two thirds of it. This is not advice, just the arithmetic of how many losses an account can take.

On a small account even the smallest lot can exceed the planned risk: 1 percent of 500 dollars with an 80-pip stop comes to 0.006 lots, and 0.01 lots nearly doubles the risk. The calculator warns you when this happens. The right answer is not to force the size but to skip the trade.