Forex Position Size & Risk Calculator
Calculate your exact lot size based on account risk and stop loss distance.
Amount at Risk:
0.00
Position Size (Lots):
0.00
Position Size (Units):
0
Mastering Forex Risk Management
In the world of currency trading, the difference between a successful trader and one who blows their account often comes down to a single factor: Position Sizing. Our Forex Calculator helps you determine exactly how many lots to trade to ensure you never exceed your predetermined risk threshold.
How to Use the Calculator
To get an accurate result, you need four key pieces of information:
- Account Balance: The total amount of equity currently in your trading account.
- Risk Percentage: The total portion of your account you are willing to lose if the trade hits your stop loss (standard practice is 1% to 2%).
- Stop Loss: The distance between your entry price and your exit-on-loss price, measured in pips.
- Pip Value: This varies by currency pair. For pairs where USD is the quote currency (like EUR/USD or GBP/USD), the pip value for 1 standard lot is typically $10.
The Math Behind the Calculation
The calculation follows a specific mathematical logic to ensure precision:
- Calculate Risk Amount: Account Balance × (Risk % / 100)
- Calculate Position Size: Risk Amount / (Stop Loss × Pip Value)
Example Calculation
Suppose you have a $5,000 account and you want to risk 2% on a trade. Your stop loss is 50 pips away and you are trading a pair where the pip value is $10 per lot.
- Risk Amount = $5,000 × 0.02 = $100
- Position Size = $100 / (50 × $10) = 0.20 Lots
In this scenario, you would open a position of 0.20 lots (2 mini lots) to ensure that if your 50-pip stop loss is hit, you only lose exactly $100.