Position Sizing in Forex: The Complete Risk Calculator Guide
Position sizing is the skill that keeps great strategies profitable. If your size is wrong, even a high win rate can fail.
The position sizing formula
Position size (lots) = Account risk / (Stop loss in pips x Pip value)
Step 1: Set account risk
Most pros risk 0.5% to 1% per trade.
Step 2: Define stop loss in pips
Your stop should be based on structure, not on how much you want to lose.
Step 3: Calculate pip value
Use the pip value method from the pip guide or your broker.
Example calculation
- Account size: $10,000
- Risk: 1% ($100)
- Stop loss: 25 pips
- Pip value needed: $100 / 25 = $4 per pip
- Position size: 0.4 standard lot or 4 mini lots (EUR/USD)
Fixed fractional risk beats fixed lot sizes
Fixed lots ignore volatility and lead to uneven results. Fixed fractional keeps risk consistent over time.
Daily and weekly risk limits
- Max daily loss: 2% to 3%
- Max weekly loss: 5% to 8% Stop trading if you hit the limit.
Use the Pip Campus Risk Calculator
Our Risk Calculator gives instant position size based on your stop and risk.
Common sizing mistakes
- Moving the stop to fit a lot size
- Forgetting spread and commissions
- Increasing size after a winning streak
Next Steps
- What Is a Pip? - Calculate pip value correctly
- Risk Management Guide - Build a risk first plan
- Create Free Account - Access the risk tools
About the Author: Pip Campus Risk Team - Helping traders control drawdowns.
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Tags
#Position Sizing#Risk Management#Lot Size#Stop Loss#Pip Value