Position size by risk

How many lots can you trade if you risk only a set percentage of your balance with the stop loss you have chosen?

Free, sign-in needed

Free, and no password: enter your email, then click the link in the message. One IBFX account covers every tool. The numbers below are an example.

Currency pair

Account currency

Account balance

USD

Measure risk as

Risk per trade

Many traders keep this to 1–2% of the balance per trade

Stop loss distance

pips

From your entry price to your stop loss price

Position size to trade

0.08lots

20.00 USD ÷ (25 pips × 10.00 USD per pip on 1 lot)

Amount at risk: 20.00 USD
Units: 8,000 EUR
Mini lots (× 10): 0.8
Micro lots (× 100): 8

How it is calculated

Lots = the amount at risk ÷ (stop loss distance in pips × the value of 1 pip on 1 lot).

The amount at risk is the money you accept losing if price reaches your stop loss: balance × risk percentage, or a fixed amount. See also the guide on the 2% money management rule.
The value of 1 pip on 1 lot works out the same way as in the pip value tool: 10 USD on EURUSD with a USD account.

Example

A balance of 1,000 USD and 2% risk per trade: the amount at risk is 20 USD. You trade EURUSD with the stop loss 25 pips from your entry; 1 pip on 1 lot is 10 USD. Lots = 20 ÷ (25 × 10) = 0.08 lots, which is 8,000 EUR.

Brokers only accept sizes in steps of 0.01 lots, so the tool suggests rounding down. Spread, swap and slippage can make the real loss larger than the figure above, especially when the market moves fast.