Calculator
Position size calculator
Position size starts with the amount you are willing to lose, not the lot size you feel like trading. Enter your balance, risk percentage, stop distance and pip value to estimate the position size.
Risk amount
$50.00
The most you intend to lose if the stop is hit.
Position size
0.20 lots
Round down to your broker's lot step.
Check the pip value for the instrument in MT5. Metals, indices and cross pairs differ from the $10 standard-lot example.
The formula
If a $5,000 account risks 1% with a 25-pip stop and a $10 pip value per standard lot: risk amount is $50, and lots = 50 ÷ (25 × 10) = 0.20 lots.
Check the pip value
The pip value per standard lot is not identical for every instrument. For many USD-quoted forex pairs a standard lot is about $10 per pip, but metals, indices and cross pairs differ. Check the contract specification in MT5 and use the value for the instrument you are trading.
Why start with risk
Choosing a lot size first and then finding a stop that fits is backwards. It turns the stop into a function of the position size, which is how a normal trade becomes an oversized loss. Start with the risk amount, then let the stop distance determine the size.
- Keep the risk per trade consistent across setups.
- Account for spread, commission and slippage in the stop distance.
- Round down when the result falls between broker lot steps.
- Recheck the calculation after a deposit or withdrawal.
Questions and answers
Does this calculator work for prop firm accounts?
The formula is the same. Use the account balance and the risk rule your firm allows, and remember that the firm calculates its drawdown from its own equity data.
What is a pip value?
It is the money value of one pip for a given position size and instrument. For a standard lot of many USD-quoted pairs it is about $10, but it varies by instrument and quote currency.
Should I risk 1% per trade?
There is no universal rule. Many traders use 0.5% to 1% as a starting range. The right figure depends on your strategy, drawdown tolerance and the rules you trade under.
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