Forex Position Size Calculator

A position size calculator puts risk first. Instead of picking a lot size and hoping the stop-loss is affordable, you decide how much of your balance a single losing trade may cost, and the calculator tells you how big the position can be.

The formula

The pip value per unit is 0.0001 dollars for pairs quoted in US dollars, and is converted for other pairs using the price or the conversion rate you enter.

Worked example

Illustrative numbers. Balance $5,000, risk 1.5% per trade, GBP/USD, stop-loss 30 pips away.

1. Money at risk: $5,000 × 1.5% = $75.
2. Units: $75 ÷ (30 × 0.0001) = 25,000.
3. Lots: 25,000 ÷ 100,000 = 0.25 lots.

Check it the other way: 0.25 lots on GBP/USD is worth $2.50 a pip, and 30 × $2.50 = $75. If you widened the stop to 50 pips while keeping the same $75 risk, the size would fall to 0.15 lots.

Reading the position size calculator result

The main figure is the lot size; the line underneath shows the dollar risk and the equivalent number of units. Your broker may only accept sizes in steps of 0.01 lots, so round down, not up. Remember what the calculation leaves out: the spread, commission, and slippage when a stop is filled in a fast market, all of which can make the real loss larger than planned.

A smaller risk percentage gives you more room for a run of losses. Losing ten trades in a row at 1.5% each, compounding on a shrinking balance, still leaves around 86% of the starting balance; at 10% per trade the same streak leaves about 35%.

Next, check the collateral this position needs in the margin calculator, and the value of each pip in the pip calculator. Costs are covered in trading fees explained.