Position sizing

Position sizing decides how much you lose when a trade hits its stop loss. Getting it right matters more than any entry signal: it's what keeps one bad trade, or a bad week, from ruining an account.

The formula

Lot size = (Account balance × Risk %) ÷ (Stop loss distance × Value per unit per lot)

Example: EURUSD

Account $2,000, risk 1% ($20), stop loss 25 pips. A pip on one standard lot of EURUSD is about $10. So: $20 ÷ (25 × $10) = 0.08 lots.

Example: gold

Account $2,000, risk 1% ($20), stop loss $8 below entry. On a 100-ounce contract, $1 is worth $100 per lot. So: $20 ÷ ($8 × $100) = 0.025 lots, rounded down to 0.02.

How much should you risk?

Many traders risk 0.5–2% per trade. At 1%, ten losses in a row cost about 10% of the account; at 5%, the same streak costs about 40%, which needs a 67% gain to recover.

Do it in seconds

Our free lot size calculator does this for any pair or gold, and the copier's risk % sizing does it automatically for every follower account.