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Forex Position Size Calculator (1)

Written by Steven Hatzakis
Fact-checked by Joey Shadeck
Edited by John Bringans

June 20, 2024

Forex trading is complicated. Multiple variables can impact your potential profits (or losses), such as lot size, account balance, trading style, risk percentage, stop-loss level, leverage, and more. Understanding how these variables can impact your overall trading strategy is a crucial part of sound risk management.

To help investors visualize these variables better, I’ve designed this easy-to-use educational lot size calculator. This calculator will take your inputs for an example trade and provide insights into your trading style and risk appetite. My lot size calculator also reveals key data about your hypothetical trade, such as margin requirements, stop-loss and take-profit levels, and risk/reward ratios.

Note: If you aren’t sure where to start, click the “Randomize” button to generate inputs for example trades.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74% and 89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Forex Position Size Calculator


How to use the calculator

To use the forex trading position size calculator, simply enter your custom values for each field (click the information icons to learn more about each input) and click “Calculate” to learn more about your hypothetical trade.

The “Randomize” button produces random risk/reward, leverage, and trading style values for each respective field. This feature is designed to highlight how small changes in risk-management related parameters can have substantial effects on trade sizes and potential trade outcomes.

Note: The forex trading position size calculator is designed purely for educational purposes; its outputs should not be construed as trading advice. Markets are inherently volatile and influenced by a wide range of factors. The descriptions and various output explanations are hypothetical examples and may not hold true in all contexts. Any assumptions, calculations, or hypothetical performance as modeled by this simulator are not indicative of future results.


Why is position size important in forex?

Whether you are trading forex, stocks, CFDs, or any financial asset, the size of your position will determine your potential profit or loss. The exact size of your trade is an important data point that will help you calculate the value of each pip (or point) as the market moves.


Position size determines your trade’s potential risk/reward exposure.

For example, a trader that is long one standard lot of a currency pair, such as the EUR/USD, has an exposure of 100,000 units (one standard lot equals 100,000 units of the euro currency in this scenario). This level of exposure (or, in other words, this position size) means that for every pip the market moves, there will be a potential gain or loss of (roughly) $10 per pip. Check out my Pip Calculator to learn more about pips and pip calculations.

What lot size is good for $1000?

To determine the best lot size for your $1,000 margin balance, you’ll need to identify the level of leverage that fits best with your overall trading strategy and risk management philosophy.

Margin requirements, based on the amount of leverage available, will impact the size of your trade and the amount of your margin balance that will be used in your trades.

With a leverage ratio of 10:1, for example, you could open a position for 1,000 units (or, one micro lot) using about 10% of your available balance (to meet the $100 margin requirement associated with a leverage ratio of 10:1). With more extreme leverage ratios, it’s possible to open even larger trades using the same percentage of your balance. However, this can increase the risk to your balance and might not be suitable for your trading strategy.

quizLooking for more leverage?

If you are in the market for a high-leverage broker, just be sure to choose one that is well-regulated, trusted, and highly rated. Check out my guide to the best high-leverage brokers.

Note: It's important to remember that there is no single correct answer or philosophy that can dictate which lot size should be chosen for your trade (or your account balance). Always consider the needs of your overall trading strategy and approach to risk management.

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About the Editorial Team

Forex Position Size Calculator (2)

Steven Hatzakis

Steven Hatzakis is the Global Director of Research for Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. A forex industry expert and an active fintech and crypto researcher, Steven advises blockchain companies at the board level and holds a Series III license in the U.S. as a Commodity Trading Advisor (CTA).

Forex Position Size Calculator (3)

Joey Shadeck

Joey Shadeck is the Content Strategist and Research Analyst for He holds dual degrees in Finance and Marketing from Oakland University, and has been an active trader and investor for close to ten years. An industry veteran, Joey obtains and verifies data, conducts research, and analyzes and validates our content.

Forex Position Size Calculator (4)

John Bringans

John Bringans is the Senior Editor of An experienced media professional, John has close to a decade of editorial experience with a background that includes key leadership roles at global newsroom outlets. He holds a Bachelor’s Degree in English Literature from San Francisco State University, and conducts research on forex and the financial services industry while assisting in the production of content.

Forex Position Size Calculator (2024)


How to calculate position size quickly? ›

Step-by-step guide to calculating position size
  1. Step 1: Determine your risk per trade. Decide how much of your total capital you're willing to risk on a single trade. ...
  2. Step 2: Calculate the risk per share. ...
  3. Step 3: Compute the position size.
May 7, 2024

How to quickly calculate lot size forex? ›

This percentage represents the trader's risk per trade. Once they have established the amount they are comfortable risking, they can calculate the appropriate lot size for a specific trade using the following formula: Lot Size = (Risk Amount / (Stop Loss in pips * Pip Value)).

How does forex position size calculator work? ›

What is a Forex Position Size Calculator? A forex position size and risk calculator enables you to easily calculate the suggested lot sizes based on variables that are unique to you, including your account equity, risk percentage and the stop loss that you have chosen.

Does leverage affect position size? ›

Leverage is an important aspect of forex trading and can impact your position sizing. It refers to borrowing funds from your broker to amplify the size of your trades.

How to decide position sizing? ›

The ideal position size for a trade is determined by dividing the money at risk or account risk limit by your trade risk. Taking forward the example we considered in the first section, The total account size is Rs. 50,000, and you set the account risk limit per trade at 1%.

What is the Kelly method of position sizing? ›

For example, if a trade with a 60% chance of winning and a 2:1 payoff ratio, the Kelly criterion suggests betting 20% of the capital for effective position sizing. b = (win amount/loss amount) - 1 In the above example b = 2/1 - 1 = 1 p = 0.6, q = 0.4 K = (0.6*1-0.4)/1 = 0.2, or 20% of capitol.

What lot size is good for a $5000 forex account? ›

To determine the best lot size for a $5000 account, traders need to consider their risk tolerance and trading strategy. A common rule of thumb is to risk no more than 1–2% of your account balance on a single trade. This means that for a $5000 account, the maximum risk per trade would be $50 to $100.

What lot size is good for a $10 forex account? ›

Given the small size of a $10 forex account, micro-lots (0.01 lots) are the most suitable option. A micro-lot allows you to trade 1,000 units of the base currency, such as USD, EUR, or GBP.

What is 90% rule in forex? ›

It goes along the lines, 90% of traders lose 90% of their money in the first 90 days. If you're reading this then you're probably in one of those 90's... Make no mistake, the entire industry is set up that way to achieve exactly that, 90-90-90.

What is the 5 3 1 rule in forex? ›

The numbers five, three, and one stand for: Five currency pairs to learn and trade. Three strategies to become an expert on and use with your trades. One time to trade, the same time every day.

What is the 60 40 rule in forex? ›

The 60/40 Rule Explained

Forex options and futures contracts are considered IRC Section 1256 contracts for tax purposes. This means they are subject to a 60/40 tax consideration. In other words, 60% of gains or losses are counted as long-term capital gains or losses, and the remaining 40% is counted as short-term.

How many pips is 1 lot? ›

A standard lot refers to 100,000 units of base currency and equates to $10 per pip movement. A mini lot is 10,000 units of base currency and equates to $1 per pip movement. A micro lot is 1,000 units of base currency and equates to $0.10 per pip movement.

How many pips to double your money? ›

For example, by risking 50 pips to try to gain 50 pips, where the 50 pips at risk is the equivalent to the value of the account and the 50 pip reward would mean doubling the account. For the first example, you would divide the balance of your account by 50 pips, to get a value per pip.

How much is 100 pips worth? ›

For the U..S dollar, when it comes to pip value, 100 pips equals 1 cent, and 10,000 pips equals $1.

What is the formula for position measurement? ›

Position Formula: Position (s) = Initial Position (s0) + (Initial Velocity (v0) * Time (t)) + (0.5 * Acceleration (a) * Time (t)^2) Average Velocity Formula: Average Velocity (v_avg) = (Initial Velocity (v0) + Final Velocity (v)) / 2.

How to calculate position size options? ›

To determine how many options contracts to buy we take our 2% investment of $200 and divide it by the price of the call/put. If the call/put is trading for $20 each, then we are going to buy 10 contracts. Once we have our position sizing figured out, we have our stop set on each trade at a 2% max loss.

How do you calculate average position size? ›

The Position Size Trading Formula

Here's how to calculate position size in trading by using a simple formula: The number of units that you buy is equal to the equity that you have in your account multiplied by the risk per trade that you want to take, divided by the risk per unit.

How do you calculate position size with margin? ›

It is the equity that will be in your account when your trade reaches the stop-loss, so it's Account Balance - Position Size * Stop-Loss * 10. Or for your example, Equity = 300 - PS * 50 * 10, where PS is the position size, which we are trying to calculate. Used Margin is (PS * Contract Value) / Leverage.

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