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Calculate the optimal lot size based on your risk tolerance and stop loss
Recommended: 1-2%
Recommended Position Size
0.40
Standard Lots
Mini Lots
4.00
0.1 lot
Micro Lots
40.00
0.01 lot
Units
40,000
Pip Value
$10.00
per lot
Risk Amount
$200.00
2% × $10,000
Max Loss at SL
$200.00
0.40 lots × 50 pips
Loading exchange rates...
Note: Exchange rates are updated daily via open APIs. For the most accurate position sizing during live trading, always verify with your broker's platform. This calculator uses rounded lot sizes — actual execution may vary slightly.
Position sizing decides how many lots you trade on a given setup. It ties together your account balance, your risk tolerance, and the distance to your stop loss. That's it. Three inputs, one output.
We build trading tools at FXTool, and we see the same pattern constantly: a trader finds a strategy with a solid win rate, tests it on demo, then blows a live account within weeks. The strategy didn't change. The sizing did. They went from 0.1 lots in testing to 1.0 lots on a live account because "it works, so why not go bigger?"
According to ESMA regulatory disclosure data, 74% to 89% of retail forex traders lose money. That's not a vague internet stat. That number comes from regulated brokers who are legally required to publish it. Bad position sizing is one of the biggest reasons.
A trader with a 60% win rate can still go broke. A trader with a 40% win rate can build wealth steadily. The difference is how much they put on each trade.
The math is simple. If you can do division, you can size a position:
Where:
Forex trades come in four standard sizes. Most retail traders use mini or micro lots:
| Lot Type | Units | Pip Value (USD pairs) | Who Uses It |
|---|---|---|---|
| Standard | 100,000 | $10 | Experienced traders, large accounts |
| Mini | 10,000 | $1 | Most retail traders |
| Micro | 1,000 | $0.10 | Beginners, small accounts |
| Nano | 100 | $0.01 | Practice and cent accounts |
These values are for pairs where USD is the quote currency (EUR/USD, GBP/USD, etc.). Cross pairs and JPY pairs have different pip values. Our margin calculator can help you figure out margin requirements for any pair.
Numbers make more sense than theory. Here are three scenarios we walk through with traders who reach out to us:
Account: $10,000. Risk: 2% per trade ($200). Stop loss: 50 pips on EUR/USD.
Each pip moves $4. If you get stopped out, you lose exactly $200. That's 2% of your account. You can take 50 consecutive losses before your account hits zero. (You won't, but that's the point.)
Same $10,000 account. Risk: 1% ($100). Stop loss: 20 pips on EUR/USD.
This trips people up. A tighter stop means a bigger position for the same dollar risk. Each pip is $5, so 20 pips x $5 = $100. The dollar risk stays the same, but the lot size goes up. This is exactly why you need to recalculate for every trade instead of using a fixed lot size.
Account: $2,000. Risk: 2% ($40). Stop loss: 50 pips on EUR/USD.
Smaller account, smaller lots. Each pip moves $0.80. Maximum loss: $40. The percentage risk is identical to Example 1. This is what professional discipline looks like on a $2,000 account. We see too many beginners try to trade standard lots on small accounts because micro lots "feel too small to matter." They matter when you're still learning.
Here's a fact that surprises people: a 40% win rate with proper sizing beats a 70% win rate with reckless sizing. Every time.
The reason is math. Losses are not symmetrical:
| Drawdown | Gain Needed to Recover |
|---|---|
| 10% | 11.1% |
| 20% | 25% |
| 30% | 42.9% |
| 50% | 100% |
| 75% | 300% |
Lose half your account, and you need to double it just to get back to where you started. That's not a minor setback. That's a hole most traders never climb out of.
At 1-2% risk per trade, even 10 consecutive losses cost you 10-20% of your account. Painful, but recoverable. At 10% risk per trade, the same streak erases your account. We've tested this across every EA we build at FXTool. The ones that survive long-term all use dynamic position sizing. The fixed-lot versions always blow up eventually on Monte Carlo simulations. Always.
If you want to understand how risk and reward interact, try our risk-reward calculator. It shows you the math behind why a 1:2 risk-reward ratio with 40% accuracy is profitable.
We've worked with thousands of traders through FXTool. These are not hypothetical mistakes. We see them every week:
1. Using the same lot size on every trade. A 1-lot trade with a 20-pip stop is 5x the risk of a 1-lot trade with a 100-pip stop. Your lot size needs to adjust with every trade. That's literally what this calculator does.
2. Sizing based on how much you want to win. "I want to make $500 today" is not a position sizing strategy. The question is always: how much can I afford to lose?
3. Doubling down after a loss. Revenge trading. It turns a 2% loss into a 10% loss into a margin call. One bad day becomes a blown account. If you catch yourself doing this, close the platform and come back tomorrow.
4. Ignoring correlated positions. Long EUR/USD, long GBP/USD, and short USD/CHF at the same time? You're not diversified. You're tripling your bet against the dollar. Your effective risk is 3x what you think it is.
5. Using all available margin. Your broker gives you 100:1 leverage. Doesn't mean you should use it. In our experience, traders who keep margin usage below 10% of their account survive. The ones who push to 30-40% margin usage are always one bad day away from a margin call. Check your margin exposure with our margin calculator.
The 1-2% fixed percentage method is where everyone should start. But there are other approaches worth knowing:
Risk a flat dollar amount (say, $100) on every trade regardless of account size. Simple, but flawed: as your account grows, the percentage drops and you leave money on the table. As your account shrinks, the percentage rises, which is the opposite of what you want.
A mathematical formula developed at Bell Labs in 1956 that calculates the theoretically optimal bet size:
Where W is your win rate and R is your average win/loss ratio. With a 60% win rate and a 1.74 R ratio, Kelly says bet 37% of your account per trade.
Don't do that. Full Kelly produces 50-80% drawdowns in practice. Most practitioners use Half Kelly or Quarter Kelly, which captures most of the growth with survivable drawdowns. The academic version looks beautiful on paper but will destroy you in a live market where win rates shift month to month.
Instead of using a fixed pip-based stop loss, you set your stop at a multiple of the pair's Average True Range (ATR). This automatically adjusts your position size for market conditions: tighter during calm markets, wider during volatile ones. It's what most of our Expert Advisors use internally.
Leverage determines how large a position you can open. Position sizing determines how large a position you should open. These are two different questions, and confusing them is expensive.
With a $10,000 account and 100:1 leverage, you could control $1,000,000 (10 standard lots). But at 2% risk with a 50-pip stop, you should only trade 0.40 lots. That uses about $400 in margin, or 4% of your account.
Two traders with identical leverage will have completely different outcomes if one sizes properly and the other doesn't. BIS research consistently shows that leverage itself is not the killer. Overleveraged position sizes are. Our risk management guide goes deeper on this topic.
If you searched for "lot size calculator" or "forex lot size calculator," you're in the right place. Lot size and position size mean the same thing in forex. The calculator above gives you the exact lot size based on your risk parameters.
A standard lot is 100,000 units of the base currency. A mini lot is 10,000. A micro lot is 1,000. Most retail traders use mini or micro lots. The calculator automatically rounds to your broker's minimum lot step.
Your stop loss distance directly determines your lot size. Wider stop = smaller lots. Tighter stop = larger lots. The dollar risk stays the same either way. Enter your stop loss in pips in the calculator above, and it does the math for you. If you need help setting stop loss levels, our risk-reward calculator helps you evaluate whether a trade setup is worth taking.
If you're running EAs on MetaTrader 5, position sizing is usually built into the EA's input parameters. Look for settings like "Risk Percentage" or "Lot Mode." All FXTool EAs include both fixed and dynamic lot sizing with automatic calculation based on account balance. Use this calculator to verify what your EA should be trading before going live.
Want this calculator running directly inside your MT5 chart? Our free Trade Calculator panel combines position sizing, pip value, and margin calculation in one draggable panel. Enter your risk percentage and stop loss — it shows the exact lot size in real time, right on your chart. No tab-switching needed.
It works with every instrument your broker offers: forex pairs, gold (XAUUSD), indices, crypto. Free to download, no subscription required — just register a free FXTool account.
The BabyPips position size calculator is one of the best-known tools in forex education, and it follows the same core formula we use here: Risk Amount / (Stop Loss in Pips x Pip Value). BabyPips recommends risking no more than 1-2% per trade, which is exactly what our default risk setting reflects.
Where our calculator adds value: live exchange rates that update automatically, support for gold and indices with correct contract sizes, and the option to download a free MT5 version that calculates position size directly on your chart. If you learned position sizing through BabyPips' School of Pipsology, this calculator applies that same knowledge with a few extra features.
Gold uses a 100 oz contract and a different pip convention than forex pairs, which is why generic calculators often get XAUUSD lot sizes wrong. We built a dedicated XAUUSD lot size calculator with gold-specific examples and the 0.01 vs 0.10 pip issue explained.
It determines the optimal number of lots to trade based on your account balance, risk percentage, and stop loss distance. It prevents you from risking too much on any single trade. The calculator at the top of this page does this automatically with live exchange rates.
1-2% of your account is the industry standard. We recommend starting at 1% or lower. Here's a simple test: if three consecutive losses would make you panic or break your rules, your risk is too high.
Divide your risk amount by (stop loss in pips x pip value per lot). For example: $200 risk, 50-pip stop on EUR/USD gives you $200 / (50 x $10) = 0.40 standard lots. Our pip calculator helps you find the pip value for any pair.
In forex, they mean the same thing. Position size is the general term. Lot size is the forex unit: standard lot = 100,000 units, mini lot = 10,000, micro lot = 1,000.
Yes. The formula is the same: Risk Amount / Risk Per Unit. For stocks, use the dollar difference between entry and stop loss instead of pip value. For crypto, the concept is identical but volatility is higher, so most traders use 0.5-1% risk per trade.
It shouldn't. Leverage affects margin requirements, not how many lots you trade. Your position size should always be calculated from your risk tolerance, not from available leverage. More leverage means you need less margin, not that you should trade bigger.
A formula for theoretically optimal bet size: K% = W - (1-W)/R, where W is your win rate and R is average win/loss ratio. It maximizes long-term growth but produces extreme drawdowns. Practitioners use Half Kelly or Quarter Kelly. Not recommended for beginners.
No. Your lot size should change with every trade based on the stop loss distance. A 20-pip stop and a 100-pip stop require different lot sizes even when the dollar risk is the same. Recalculate every time, or use the calculator above.
Need automated risk management?
Our Expert Advisors include built-in position sizing and risk management features.
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