What is position sizing in forex trading?

Position sizing is the process of calculating the number of lots to trade so that the maximum loss on a losing trade stays within a fixed percentage of your account balance, typically 1-2%.

How do you calculate position size?

Position size is calculated as (account balance × risk percentage) ÷ (stop loss in pips × pip value). The calculator divides your allowed risk amount by the per-pip loss at your stop to output the standard lots to trade.

The 2% rule limits your risk on any single trade to 2% of your account balance, so a losing streak cannot wipe out your capital and you can survive long enough for profitable trades.

Free Trading Tool

Position Size Calculator

Calculate the optimal lot size based on your risk tolerance and stop-loss distance.

How do I calculate my forex position size?

Position size is (account balance × risk percentage) ÷ (stop loss in pips × pip value). With a $10,000 account risking 2% ($200) and a 50-pip stop, you size the trade so the maximum loss equals $200, which the calculator converts into standard lots.