Tool 01 / Position sizing
How big should the trade be?
The lot size that makes a losing trade cost what you decided it should cost — not more.
Formula shown below. The maths is plain, so you can check it by hand.
$10 per pip per standard lot is the usual value for USD-quoted pairs. Adjust it for your pair and account currency.
Result
- Risk amount
- —
- Position size
- —
- Units
- —
The formula
Risk first, then size.
- Risk amount = balance × risk % ÷ 100. This is the money you are willing to lose on the trade.
- Lots = risk amount ÷ (stop distance in pips × pip value per lot).
- Units = lots × 100,000 (one standard lot).
Worked example
A $10,000 account risking 1% with a 50-pip stop and $10 pip value: risk amount is $100, and 100 ÷ (50 × 10) = 0.20 lots (20,000 units).
The result is floored to the nearest 0.01 lots, so the real risk never silently exceeds the percentage you chose.
What this tool does not do
It does not tell you which pair to trade, where to put the stop, or whether the trade should exist at all. Risk sizing protects a plan; it does not replace one.
Risk warning: leveraged trading can produce rapid losses. Never risk money you cannot afford to lose.