Position size calculator
A position size calculator answers the question beginners usually ask last: how big should this trade be? Enter your account balance, the percentage you are prepared to risk, the pair and the distance to your stop-loss. The tool returns the position in units and lots.
The formula
Position (units) = money at risk ÷ (stop distance in pips × pip value per unit)
Lots = units ÷ 100,000 (or ÷ 100 for gold)
The pip value per unit is the pip size converted into dollars: 0.0001 for EUR/USD, 0.01 ÷ price for USD/JPY, and $0.01 per ounce for gold.
Worked examples
Illustrative numbers, costs ignored.
- EUR/USD. Balance $5,000, risk 1% = $50. Stop 20 pips away. Units = 50 ÷ (20 × 0.0001) = 25,000, which is 0.25 lots. Check: 0.25 lots is $2.50 a pip, and 20 pips × $2.50 = $50.
- Gold. Balance $5,000, risk 2% = $100. Stop $8.00 below entry, which is 800 pips of $0.01. Ounces = 100 ÷ (800 × 0.01) = 12.5 oz, or 0.125 lots of 100 oz.
- USD/JPY at 150.00. Balance $10,000, risk 1% = $100, stop 40 pips. Pip value per unit = 0.01 ÷ 150. Units = 100 ÷ (40 × 0.01 ÷ 150) = 37,500, or 0.375 lots.
Reading the position size calculator result
The result is the largest position that loses roughly your chosen amount if the stop-loss is hit at its price. Many platforms only accept lot sizes in steps of 0.01, so round down, never up. Spreads, commission and slippage come on top, so the real loss can be a little larger; our costs lesson shows how much.
Notice what the formula does: a wider stop produces a smaller position, and a tighter stop a larger one. The money at risk stays the same. That is the point of sizing this way.
Next, run the result through the margin calculator to confirm you have enough margin, and see the pip calculator to check the value of each pip.