The Position Size Formula (with a Worked Example)
Risk amount = account balance x risk %
Position size (lots) = risk amount / (stop in pips x pip value per lot)
Lots are floored to your broker lot step, never rounded up.
Worked example: risking 2% of a $10,000 account ($200) with a 24 pip stop on EURUSD, where one pip is worth $10 per standard lot, gives 200 / (24 x 10) = 0.83 lots, or 83,000 units.
Contract Sizes and Pip Values by Instrument
Lot Sizes Explained: Standard, Mini, Micro
A standard lot in forex is 100,000 units of the base currency, a mini lot is 10,000 units (0.1 lots), and a micro lot is 1,000 units (0.01 lots). Most retail brokers let you trade in steps of 0.01 lots, which is why the calculator offers 0.01, 0.1, and 1.0 lot steps.
The calculator always floors your position down to the nearest lot step rather than rounding up. Rounding up would push your risk above the amount you set, so flooring keeps you at or below your intended risk on every trade. When the exact size falls below your broker minimum, the panel flags it so you can widen the stop or lower the risk instead of trading blind.
Using This Calculator with MT4 or MT5
The lot sizes this tool produces transfer to MetaTrader one to one. In MT4 or MT5, right-click a symbol and open Specification to see its contract size and tick value, which are the same inputs used here. Type the lot size the calculator gives you into the order ticket and your risk will match.
One thing to watch: MT5 can display margin differently depending on the account margin-calculation mode, and some brokers quote gold or index contracts in non-standard sizes. When the numbers look off, confirm the contract size in the symbol specification and enter the current price manually so the margin row matches your platform.
Risk per Trade: How Much Should You Risk?
A common convention is to risk 1% to 2% of your account on any single trade. Risking a fixed percentage (fixed-fractional sizing) means your position shrinks after losses and grows after wins, which protects the account through a losing streak. Risking a fixed dollar amount is simpler but does not adapt as the balance changes.
Position sizing matters more than being right about direction. A trader with a modest win rate who sizes every trade to a consistent 1% risk will outlast a sharper trader who bets erratically. If you want to see how streaks and risk percentage interact, pair this tool with the expectancy and risk-of-ruin calculators.
