The Position Size Calculator

Position sizing calculator is one of the most important tools a trader should keep by his side for proper risk management.

It works with all major currency pairs and crosses. It just requires only few input values and you get the value suitable for your trade. All you need to do is to fill the form below and press the “Calculate” button:

Proper position sizing is a key to managing risk and protects your account from being blown on just a single trade.

By just filling in the correct required inputs our position size calculator will help you find the appropriate amount of currency units to buy or sell to control your maximum risk per position.

Results

The Amount at Risk show the dollar amount risked. The Position Size is the actual number of units you’re trading of a particular currency. The Standard Lots, Mini Lots and Micro Lots are the values you will need to enter into your trading platform. The one you use depends on your account size.

If you are trading a standard account, then you will use the standard lot size, if you are trading a mini account, you use the mini standard lot and if you are trading a micro account, you will use a micro lot size.

What are the required inputs needed to determine Position Size for Trade.

Your account currency: This will be whatever currency you have opened your account with your broker to trade Forex. Your account can be in U.S dollars, Euros, GBP or any other currency as long as it is accepted by your broker.

Account balance:  This represents the amount of money you have on your account. This is where you will enter your account size in terms of the account currency denomination. So if you are trading with $10,000, enter 10,000 as your account balance.

Your account Risk per Trade: This is the most important step for determining forex position size. You must know how much money you are willing to risk per trade before thinking about the position size. Set a percentage of how much you want to risk from your account on each trade. Most professional traders risk 1% or less of their account or sometimes 2%.

For example, with a $10,000 trading account, you can risk $100 per trade for every 1% risk on the trade or $50 for every 0.5%risk per trade, if you risk 2%, it would be $200

The other variables of a trade may change but the account risk per trade should be kept constant. Choose how much you’re willing to risk on every trade, and then stick to it. Don’t risk 5% on one trade, 1% on the next, and then 10% on another. If you choose 1% as your account risk limit per trade, then every trade you should risk1%.

 Determine the stop loss in pips:

For proper risk management, your position size should be able to fit your stop loss.

Stop loss in pips is determined by the difference between the entry point and where you place your stop loss order. The stop loss closes out the trade if it goes the opposite direction losing a certain amount of money.

Stop loss in pips can vary on different trades taken depending on the market volatility conditions.

When the market is highly volatile, making large price movements, stop loss is normally set far from the entry level but when the market is slow with low volatility, stop loss is set closer to the entry point.

When you make a trade, consider both your entry point and your stop loss location. You should always aim at having your stop loss as close to your entry point as possible, but not so close that the trade is stopped out before the move you’re expecting occurs.

Once you know how far away your entry point is from your stop loss, in pips, you can calculate your ideal position size for that trade.

 The currency pair you are to trade

Next you will select the currency pair you’re trading. The position size calculator also requires you to fill in the currency pair you are going to trade. For example it can be USD/CHF, EUR/JPY, USD/CAD, CHF/JPY or any other pair on the platform.

To determine Position Size for Trade using a formula.

Position size = (Account size ×% risk per trade)/ (stop loss in pips × pip value)

For any given trade, once you have already determined the amount to risk per trade and the stop loss in pips and the pip value of the currency pair, you can substitute in the above formula to get the position size for your trade.

Assume you have a $10,000 account and risk 1% of your account on each trade. You can risk up to $100, and see a trade in the EUR/USD where you want to buy at 1.22375 and place a stop loss at 1.22066. This results in 30 pips of risk.

Position size = (Account size ×% risk per trade)/ (stop loss in pips × pip value)

For a standard size pip value = $10

= ($10,000 x 1%)/ (30 x10)

= 100/300

= 0.33

For min size, pip value =$1

Position size = (Account size ×% risk per trade)/ (stop loss in pips × pip value)

= ($10,000 x 1%)/ (30 x $1)

= 100/30

= 3.33

For a Micro size, pip value =$0.1

Position size = (Account size ×% risk per trade)/ (stop loss in pips × pip value)

= ($10,000 x 1%)/ (30 x $0.1)

= 100/3

= 33.33

If you trade a standard lot, then each pip movement is worth $10. Therefore, taking a one standard lot position will result in a risk of $0.33. But if you risk $100 on a position of 3.33 mini lots (equal to one standard lot, $1). If you lose 30 pips on a 3.33 mini lot position, you’ll have lost $100. To trade on a micro size ($0.1 standard lot) risking the same amount on a trade and using the same stop loss in pips, it will require you to use 33.33 as your position size.

The number of lots the formula produces is linked to the pip value used into the formula. If you put the pip value of a micro lot, the formula will produce your position size in micro lots. If you put a standard lot pip value, then you’ll get a position size in standard lots. The same goes when you put a mini lot pip value. Read more

 

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