What is position sizing?
Position sizing is the practice of deciding how many units or lots to trade so that a single loss does not exceed a set percentage of your account. By using a fixed risk per trade (e.g. 1% or 2%), you keep drawdowns under control and stay in the game over the long term.
Why risk management matters
Risk management protects your capital. Even with a good strategy, a string of losses can wipe out an account if position sizes are too large. Limiting risk per trade (and using a stop loss) ensures that no single trade can do serious damage and helps you stick to your plan emotionally.
How to use this calculator
Enter your account balance in USD, the percentage you are willing to risk, and your stop loss in pips. Select the symbol (forex pair or metal). For USD base pairs (e.g. USD/JPY) and cross pairs (e.g. EUR/JPY, EUR/GBP), enter the current price or conversion rate so pip value in USD can be calculated. Results show risk amount in USD, lot size in standard lots, micro lots, and exposure in units. Account currency is USD only; calculations follow MT4/MT5 broker standards.