Calculate optimal position sizes based on your risk tolerance.
Calculate optimal position sizes based on your risk tolerance.
Missing: Account Balance, Entry Price, Stop Loss Distance (pips)
Input your total account balance and select your account currency.
Choose how much of your account you're willing to risk on this trade (typically 1-2%).
Select your currency pair and enter your planned entry price.
Enter the distance in pips from your entry to your stop loss level.
Learn the fundamentals of position sizing and why it's crucial for successful trading.
Position sizing is the process of determining how much of your trading capital to allocate to each trade. It's a fundamental risk management technique that helps protect your account from significant losses while maximizing potential profits.
Professional traders typically risk only 1-2% of their account balance on any single trade. This conservative approach ensures longevity in the markets and protects against catastrophic losses.
Understanding risk-reward ratios is crucial for profitable trading. A good risk-reward ratio ensures that your winning trades compensate for your losing trades.
Understanding the difference between account balance and equity is essential for proper position sizing calculations.
Real-world position sizing examples showing different risk scenarios and calculations
$10,000 account, 1% risk, EUR/USD trade with 30 pip stop loss
Risk Amount: $10,000 × 1% = $100 Position Size: 0.33 lots
Result: Position Size: 0.33 lots (33,000 units)
$25,000 account, 1.5% risk, GBP/USD trade with 25 pip stop loss
Risk Amount: $25,000 × 1.5% = $375 Position Size: 1.5 lots
Result: Position Size: 1.5 lots (150,000 units)
$20,000 account, 2% risk, GBP/USD trade with 40 pip stop loss
Risk Amount: $20,000 × 2% = $400 Position Size: 1.0 lots
Result: Position Size: 1.0 lots (100,000 units)
$15,000 account, 1.5% risk, USD/JPY trade with 15 pip stop loss
Risk Amount: $15,000 × 1.5% = $225 Position Size: 1.5 lots
Result: Position Size: 1.5 lots (150,000 units)
Expert advice to improve your position sizing strategy
Begin with 0.5% risk per trade until you're consistently profitable, then gradually increase to 1-2%.
Never enter a trade without a predetermined stop loss. This is essential for position size calculation.
Avoid taking multiple positions in highly correlated pairs (e.g., EUR/USD and GBP/USD).
Reduce position sizes during high-volatility periods like major news events.
Review your position sizing strategy monthly and adjust based on performance.
If your account is in drawdown, consider reducing position sizes until you recover.
Common questions about position sizing and risk management
Most professional traders risk 1-2% of their account per trade. Never risk more than 5% on a single trade.
Use our position size calculator which automatically adjusts for different currency pairs and account currencies.
Always use percentage-based sizing. Fixed lot sizes don't account for changing stop loss distances.
Never trade without a stop loss. It's impossible to calculate proper position size without knowing your maximum risk.
Reduce your risk percentage during high volatility periods. Consider using 0.5-1% instead of your normal 2%.
Yes, but do it gradually. Increase by 0.25% increments and never exceed 3% risk per trade.
Use your account equity (balance + unrealized P&L) for position sizing, not just your balance.
Ensure your total portfolio risk doesn't exceed 6-10% across all open positions.
