Position sizing is the most important risk management decision on every trade. This calculator eliminates guesswork by computing your optimal lot size based on your account size, the percentage you are willing to risk, and your planned stop loss distance.
Position Size Calculator
How Position Sizing Works
The formula is: Lots = Risk Amount / (Stop Loss Pips x Pip Value). For a $10,000 account risking 2% with a 50-pip stop on EUR/USD: $200 / (50 x $10) = 0.40 standard lots.
The Risk Percentage Rule
Professional traders risk 0.5-2% per trade. At 1%, you can survive 50 consecutive losses before losing half your account. At 2%, approximately 34 consecutive losses. This mathematical edge is why position sizing is the cornerstone of professional trading.
Frequently Asked Questions
Divide the dollar amount you risk by (stop loss pips x pip value per lot). Example: $200 risk / (50 pips x $10) = 0.40 standard lots.
Never risk more than 2% of your account on a single trade. On a $5,000 account, maximum risk is $100 per trade.
With 1% risk ($10) and 20-pip stop loss on EUR/USD, trade 0.05 lots (5 micro lots). Always calculate based on your specific stop loss.
Position sizing determines capital exposure per trade. Correct sizing with stop-losses is the foundation of trading survival and long-term profitability.