Position sizing is one of the most crucial risk management tools for traders.

Generally you risk no more than 2% of your balance per trade.

That said, working out exactly what that means in notional terms can be confusing so we have built a calculator to help you.

Simply enter in a few details like currency pair and stop loss distance from market etc. and our calculator will work out the appropriate position size for you.

Forex calculators

Pip value, gain and loss, and position / lot size calculators

Calculators

1
Pip value
2
Gain & loss
3
Position size

Pip value calculator

Calculating pip values can be confusing - especially if your account balance is in a different currency.

Do not worry. Simply enter a few details and our pip calculator will do the rest for you.

An example of the pip calculator in action

In the example above we have a position of 100,000 EURUSD. Our balance is in GBP.

We hit calculate and we can see one pip is worth £8.

  • If the market moves one pip higher I make £8.
  • If the market drops one pip lower I lose £8.
  • If it moves ten pips it becomes a PNL of £80 etc.

That's it. Very simple!

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Gain and loss calculator

Our gain and loss calculator helps you calculate how well or poorly your trade went - your P&L in other words.

Simply plug in a few details and you'll be able to see what you have made and lost in both account balance and percentage terms.

The first stage looks like below - you'll be asked to enter some inputs.

Stage one of the calculator

So we're going to enter an account balance of 100,000 and let's say a Gain.

Now we just need to enter one of the right. We can choose any one and it automatically calculates the others. I'll enter amount gained of 3,200.

The results

And there we have it. It's really that simple.

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Position size or lot size calculator

If you have read the article on risk management you'll know that choosing an appropriate position size is crucial. If you haven't read it check it out here: The A-Z of Risk Management for Traders.

Anyway, let's assume you understand the concepts and you want to take only 2% risk on this trade.

The lot size or position size calculator makes things easy

You can see we enter in a few simple things:

  • Our account currency
  • Our account balance
  • What % of balance we are willing to risk on the trade
  • The stop loss distance in pips
  • The pair we're trading

Now the calculator spits out the position size we should use to achieve these goals. It also provides it as a lot size to make things easier.

The output from the forex trading calculator

So in our example we are risking 2% of our 25,000 AUD balance which is 500 AUD. This means we should take a position size of just 52,756 EURUSD - given our stop of 65 pips.

Nice! Now we can trade safely by avoiding the risk of being over-leveraged and risking too much on a single trade. This is one of the classic mistakes from new traders.

Calculating this manually can be boring and tricky ... but it takes five seconds with the lot size / position size calculator so there's no reason not to use it on all your forex and gold trades.