Position size calculator
This position size calculator works backwards from risk. Enter your balance, the percentage you are willing to lose on one trade, the pair and the distance to your stop-loss in pips, and it returns the size, in units and lots, that keeps a stopped-out trade within that limit.
The formula
Position size (units) = amount at risk ÷ (stop distance in pips × pip value per unit)
For a dollar-quoted pair the pip value per unit is simply the pip size, 0.0001. For other pairs it is converted into dollars at the current rate, which the calculator handles. Divide the units by 100,000 to express the answer in standard lots (or by 100 for gold ounces).
Worked example
Illustrative figures:
- Balance: $5,000. Risk per trade: 1%, so the amount at risk is $50.
- Pair: EUR/USD. Stop-loss: 20 pips from entry.
- Units = $50 ÷ (20 × 0.0001) = 25,000 units, which is 0.25 standard lots.
- Check: 0.25 lots is worth $2.50 per pip, and 20 pips × $2.50 = $50. The numbers agree.
If the same trade needed a 50-pip stop, the size would fall to 10,000 units (0.10 lots) for the same $50 of risk. A wider stop means a smaller position, not a bigger loss.
How to read the result
The answer is the most you can trade while keeping a stopped-out loss near your chosen amount. It is not a guarantee: in fast markets or over a weekend gap the price can jump past your stop, and the fill can be worse. Spreads and commissions also add to the loss. Round the size down, not up, if your broker only accepts certain increments.
Next, check how much margin the position will need with the margin calculator. If the margin is a large share of your balance, the position is still too big for comfort, whatever the stop says. The pip calculator shows the money value of each pip at the size you choose.