Position Size Calculator
Use our precise position size calculator using live market rates. Calculate the suggested lot size per trade based on your account equity and risk percentage.
What are Lots in Forex
A lot in forex defines the position size, or, the trade size. It is the number of currency units to be sold or bought in a trade. In forex trading 1 standard lot equals to 100,000 units of the base currency. For example, when an investor enters a long 1 lot EUR/USD trade, he/she is buying 100,000 units of the Euro (base currency) versus the USD (counter currency).
Several retail forex brokers also offer FX trading with fractional lot sizes; from 0.99 down to 0.10 (mini lots). In an attempt to popularize currencies trading, and attract new business, other retail brokers also offer smaller trade sizes, 0.01 (mini lots) and even 0.001 (nano lots).
Check out the image above to compare the common trade sizes and respective currency units.
How to Calculate Lot Size (Suggested)
When trading forex the trade size in units can be a more important factor than the entry and exit points. The trade size, too small, or too big, will be related to the trade risk. And risking too much, can easily blow up a trading account.
The position risk can be divided into two parts. The trade risk and the account risk. These two variables can be fitted together to give traders the ideal position size, and prevent the account equity to be erased in a single trade.
The ideal position size can be calculated using the following formula:
For example, a trader has a $1,000 account and decides to go long 1 lot on the GBP/USD pair at 1.3875, with a stop loss at 1.3871. That means the trader is risking 4 pips, and with a pip value of $10 per pip, for 1 lot of GBPUSD, the total account risk is $40, which is equal to 4% of the account equity.
So, what would be the right lot size to risk only $10, or 1% of the account equity? To find out the recommended position size we complete the formula with these variables:
If the trader decides to risk $20, 2% of the account equity instead, for the same trade, then we change the formula to:
Now you know how to calculate lot sizes (suggested) manually, risking only the recommended 2% of the account equity per trade. But there's a much easier way to calculate the recommended position size, for cryptocurrencies crosses, forex, metals and indices. Simply input your data on our Position Size Calculator!
How to Use our Position Size Calculator
Let's see how to use our position size calculator, field by field, to get the suggested lot size and risk for your account equity.
Currency pair: Traders can select from the most popular cryptocurrencies (DOGE, XRP, ETH, BTC, LTC, etc.) against the main fiat currencies, the Major forex crosses and Minor pairs, Gold/Silver and the most popular indices. Let's choose, for example, the GBP/USD.
Deposit currency: The position size calculator is ready for most deposit currencies, including accounts in cryptocurrencies and fiat currencies, from AUD to ZAR. We will select USD as the deposit currency, for our example.
Stop loss (pips): Input the maximum number of pips to risk in the trade, to protect the account equity in case the market goes against their position. For this example, we will use 40 pips as our stop loss.
Account balance: Input the account equity. For our example we will type 1000.
Risk: The main variable of this Position Size and Risk Calculator. By default, the calculator is set to account %, but traders can also select any amount of their account base currency ($2, $20, $40, etc). Consider a quick visit to our professional traders do not risk more than 2% of their account equity per trade article and learn why this technique allows traders to last longer with their trading careers, and eventually, to recoup from previously losing trades. Thus, for our example we will select 2% risk.
Now, we hit the "Calculate" button.
The results: The Position Size and Risk Calculator connects to live market prices with the current interbank rate (in a 5-digit format), and displays the results in the selected deposit currency.
The first result is the recommended position size. Using a stop loss of 40 pips and risking 2% of our account equity, the result is 0.05 lot.
Next result is the number of units that 0.05 lot represent: 5,000 currency units. The third result is the portion of the account equity at risk, or the value of the position, in this case 20 USD.
Please consider also the use of our Drawdown Calculator. It can help traders to accurately calculate how the trading account equity can be affected after a series of losing trades.
Add this Lot Size and Risk Calculator to Your Website
Our set of calculators use live market rates, allowing traders to get the most accurate calculations possible. These calculators work with most forex pairs (Major and Minor crosses), world indices, metals and with the most popular cryptocurrencies: BTC, DOGE, XRP, LTC, ETH and many more.
Not only it is possible to calculate with precision the recommended lot size for a DOGE/USD trade, based on your account equity and risk percentage, or for a 0.10 lot short EUR/USD trade, for example, but also, these great calculators are localised in 23 different languages, including Chinese, Russian, Arabic, and Japanese.
With a user-friendly interface and an intuitive design, these tools can be easily customized and embedded with any web page. The great advantage of our tools is that they are completely unbranded, without any 3rd party logos. Plus, these tools can be be fully customized to match the colour scheme and the layout of any web page.
If you consider that this complete suite of calculators might create added value for your web pages, or to simply complement a "Tools/Calculators" section of your portal, you are free to embed them on your website.
All the widgets can be used and embedded as they are, or they can be fully customized to suit your website’s colours. After configuring the settings, simply copy/paste the final code to embed the tool/calculator widget on your web page.
Our Position Size Calculator is powered by CBFX trading tools.