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Position Size Calculator — Forex Risk-Per-Trade Sizing
How position size is calculated
Lot Size = (Account Equity × Risk %) ÷ (Stop Loss in Pips × Pip Value per Lot)
Rounded DOWN to the broker's lot increment (typically 0.01).
Where:
Risk Amount = Account Equity × Risk %
Pip Value per Lot = Pip Size × Contract Size × FX rate
(= $10 for FX majors, $1 for XAUUSD, ~$6.67 for USDJPY)The fixed-fractional model holds risk-per-trade constant as a percentage of CURRENT equity rather than a fixed dollar amount. As the account grows, lot sizes scale up; after losses, lot sizes scale down — drawdowns stay bounded automatically. The formula has three free parameters: account equity (read from MT5's Account window), risk percentage (1% is the retail default; 0.5% for prop-firm challenges), and stop-loss distance (set by the EA or your manual trade plan). The fourth term — pip value per lot — is determined by the symbol and account currency and rarely changes within a session. Always round DOWN to 0.01 lots because rounding up breaches the risk budget by the difference between target and rounded position.
Worked example
Inputs
- Account equity: $5,000 USD
- Risk per trade: 1.0%
- Currency pair: EUR/USD
- Stop loss: 40 pips
Calculation
- Compute risk amount: $5,000 × 0.01 = $50.
- Identify pip value per 1.0 lot on EURUSD with a USD account: $10/pip.
- Plug into formula: Lot Size = $50 ÷ (40 × $10) = $50 ÷ $400 = 0.125 lots.
- Round DOWN to the broker's 0.01 increment: 0.12 lots.
- Verify actual risk: 0.12 × 40 × $10 = $48 (0.96% of equity, just under the 1.0% target).
Result: 0.12 lots (target 0.125, rounded down for the 0.01 broker increment)
Edge cases & special pairs
- Cent account (1 lot = 1,000 units)Pip value per lot is 100× smaller than Standard, so the computed lot size is 100× larger. A $50 risk on 40-pip EURUSD stop = 0.125 lots Standard becomes 12.5 lots Cent (which is still only $50 risk because each Cent-lot is 1/100th of a Standard-lot).
- JPY pair on non-JPY accountUSDJPY pip value in USD varies with the USDJPY rate. At USDJPY 150, pip value ≈ $6.67/lot. A 40-pip stop and $50 risk produces 0.187 lots, rounded to 0.18. Use the live MT5 USDJPY rate in the conversion field above.
- Gold (XAUUSD)Pip value = $1/pip per 1.0 lot (contract is 100 oz, not 100,000 units). For the same $50 risk on a 500-pip XAUUSD stop: 0.10 lots. Note the much wider stop distances typical of XAUUSD — gold's volatility means 200-500 pip stops are normal.
- Multiple correlated EAsPer-EA risk must be smaller when running multiple EAs on correlated symbols. For N moderately-correlated EAs targeting total Y% risk, set per-EA risk = Y / sqrt(N × 1.5). For 5 EAs at 1% total target: 1 / sqrt(7.5) ≈ 0.37% per EA per trade.
- Prop firm challenge accountsHalve the standard 1% to 0.5% per trade. Prop firm daily-loss limits (typically 5%) leave little room for 3 consecutive losses at 1% each. 0.5% per trade × 3 losses = 1.5% daily, well under the 5% limit.
- Wide-stop swing strategiesDaily-timeframe strategies often use 200-500 pip stops on majors. Lot sizes drop proportionally — a $50 risk on 200-pip stop is 0.025 lots (rounded to 0.02). At broker-increment minimums (0.01), accounts under $2,000 cannot meaningfully run daily-timeframe strategies at 1% risk.
- Account currency driftIf the account currency strengthens against the symbol's quote currency between trade entry and exit, the effective P/L in account currency is smaller than the pip count suggests. The position-sizing formula uses the trade-entry rate; the realised P/L uses the trade-exit rate. Most EAs ignore the drift; it is usually <2% on hourly trades.
When to use this calculator
Use this calculator before every trade you place manually, and as the math reference for every EA's RiskPercent input. The calculator answers the precise question: what lot size satisfies my target risk percentage for this specific stop-loss distance and this specific account state? Every trade requires this answer — fixed-lot sizing without recomputing as equity changes is the most common path to blown accounts. For automated EAs, configure them with RiskPercent (most reputable EAs expose it) and let them call the equivalent of this calculation internally on every signal. Verify the EA's computation matches this calculator's output for a representative case before going live; vendors occasionally implement the formula incorrectly (especially around the JPY conversion or the rounding direction).
Related guide: How to calculate risk per trade (deep-dive guide) →
Frequently asked questions
Should I round the lot size up or down to the broker's increment?
Some EAs offer a 'round to nearest' option which seems balanced but is mathematically biased toward over-risking on average across trades. Stick with 'round down' as the default. The few cents of foregone profit per trade are negligible vs the catastrophic-loss-prevention value of never exceeding the risk budget.
How is the EA's RiskPercent input supposed to work?
If the EA exposes both LotSize and RiskPercent inputs, RiskPercent usually takes precedence. Confirm by reading the vendor's documentation — some EAs use LotSize as a hard cap (clamps the RiskPercent-computed lot) while others ignore LotSize entirely when RiskPercent is non-zero. The MT5 Strategy Tester report can help verify: backtest with two different equity starting points and check that lot sizes scale proportionally.
What's the right risk percentage to use?
The mathematical basis for 1% as the default is Half-Kelly applied to a typical retail EA with Profit Factor ~1.7 and Win Rate ~55%. Full Kelly for that profile would be ~25% per trade — clearly insane in practice because the inputs are estimates, not certainties. Quarter-Kelly (6%) is what professional managers use; 1% retail is roughly 1/8 Kelly, conservative enough to survive estimation error on the EA's true edge.
Do I use the same risk percent across all symbols on the same account?
The math: portfolio-level risk = sqrt(sum of squared individual risks) for uncorrelated EAs. For correlated EAs (correlation > 0.7), portfolio risk ≈ sum of individual risks. Real EA portfolios are 30-70% correlated. Practical guideline: if total per-trade risk across all currently-open positions exceeds 3% of equity, you're over-extended regardless of how each individual EA was configured.
Can the calculator give me a lot size below 0.01?
Below the 0.01 minimum, you face three options: (1) use a Cent account where 0.01 Cent-lot = 0.0001 standard lot — useful for very small accounts but with $5-50 minimum effective P/L per trade. (2) Move to wider stops where 0.01 lots is enough exposure (e.g. daily-timeframe strategies with 200+ pip stops). (3) Increase account size so 1% risk produces ≥0.01 lots. For a 40-pip EURUSD stop, 1% risk = 0.01 lots requires $400 account equity minimum.
What's the difference between fixed-lot and fixed-fractional sizing?
Concrete comparison: $1,000 account, 0.10 lot fixed (= ~$10 per pip = ~10% risk per trade on a 100-pip stop). After 3 consecutive losses: equity $700, but you're still trading 0.10 lot which is now 14% risk per trade. Drawdown compounds because losses scale up as a percentage. Fixed-fractional at 10% per trade: lot size scales down with equity (now 0.07 lot on $700), so the next loss is still 10% of remaining equity, not 14%. Same EA, different risk math.
What if pip value changes between when I size the trade and when the stop triggers?
The drift becomes significant on multi-day swing trades on JPY pairs during volatile macro periods (e.g. when the JPY moves 5% in a week, pip value moves the inverse). For prop-firm challenges this can matter — a perfectly-sized trade at entry can over-risk at exit if the pair's quote currency strengthens unexpectedly. The mitigation: re-size positions daily for multi-day swing trades on cross-currency pairs, or accept the drift as part of the noise.