Forex Position Size Calculator: How Position Size Is Calculated

All prices and rates below are illustrative examples, not live quotes.

The inputs

• Account balance: used if you express risk as a percentage you choose.
• Risk amount: the maximum you've decided to lose if the stop is hit.
• Entry and stop-loss prices: their difference, in pips, is the stop distance.
• Pip value per lot: depends on the pair and your account currency.

The formula

Stop distance (pips) = |Entry − Stop| ÷ Pip size
Position size (lots) = Risk amount ÷ (Stop distance × Pip value per lot)
Units = Lots × 100,000

Example

JPY pairs and other account currencies

For USD/JPY, the pip size is 0.01 and pip value per lot is 1,000 JPY, which must be converted to your account currency at a rate you enter. If your account is in EUR and you trade GBP/USD, pip value is in USD and needs a USD→EUR rate. The MoneyTools calculators ask for that rate when it's needed.

What the formula leaves out

• Spread and commission add to the loss if the stop is hit.
• Slippage and weekend gaps can fill a stop at a worse price.
• Brokers round to their minimum lot step, so the actual risk may differ slightly.

Calculator walkthrough

1. Open the Forex Position Size Calculator.
2. Enter account balance and the risk you've chosen.
3. Choose the pair and enter the stop distance or prices.
4. Enter a conversion rate if asked.
5. Press Calculate to see lots and units.