How to use the position size calculator
- Choose the instrument and your account currency. Currency prices are filled in from the day's reference rates; for gold and silver, type the current price.
- Enter your account balance and the share of it you're willing to lose if the stop loss is hit.
- Enter the stop loss distance in pips, measured from your entry price.
- Read the position size in lots, then enter it in MetaTrader or your expert advisor's settings.
The position size formula
Position sizing works backwards from the amount you're prepared to lose:
Risk amount = account balance × risk %
Lots = risk amount ÷ (stop loss in pips × pip value per lot)
The pip value per lot depends on the instrument and your account currency. Our pip value calculator shows that step on its own.
Worked examples
EUR/USD with a USD account
Balance $10,000, risk 1%, stop loss 25 pips. The risk amount is $100. One pip on a standard lot of EUR/USD is worth $10, so the 25-pip stop costs $250 per lot. $100 ÷ $250 = 0.40 lots.
Gold (XAU/USD) with a USD account
Same $100 risk, stop loss 50 pips ($5.00 of gold price, since one pip is $0.10). One pip on a standard lot of 100 oz is worth $10, so the stop costs $500 per lot. $100 ÷ $500 = 0.20 lots.
Why size by risk instead of using a fixed lot
A fixed lot size risks more money on trades with wide stops and less on trades with tight ones, so a single wide-stop loss can undo several winners. Sizing by risk keeps every loss the same share of your account. At 1% per trade, ten losses in a row leave the account about 9.6% below its peak, a drawdown most strategies can recover from. The drawdown calculator shows how that changes at higher risk.
If you run an expert advisor, look for a risk-percent or “auto lot” input that does this calculation for you, and check it against this calculator on a demo account first.