Position Size Calculator

Position sizing is the single most important risk-management decision in trading: it determines exactly how much you stand to lose if a trade hits its stop-loss, regardless of how confident you feel about the setup. Risk-based position sizing works backwards from the amount you are willing to lose — a fixed percentage of your account balance — rather than picking a lot size first and hoping the loss is tolerable. The calculation combines three inputs: your account balance, the percentage of it you are willing to risk on this one trade, and your stop-loss distance in pips. From those, the position size (in lots) is risk amount ÷ (stop-loss pips × pip value per lot) — so a wider stop naturally produces a smaller position size, and a tighter stop allows a larger one, while the dollar amount at risk stays constant. Most professional traders risk a small, consistent fraction per trade — commonly 0.5% to 2% — specifically so that a losing streak, which happens to every strategy eventually, erodes the account slowly enough to keep trading rather than forcing a blow-up.