Position Size Calculator
Enter your balance and stop loss — get the exact lot size for the risk you choose.
Based on a USD account; excludes spread, swap and slippage.
What is the 1% rule?
The 1% rule says that no single trade may cost you more than 1% of your account balance if price hits your stop loss. On a $10,000 account, one losing trade must not exceed $100 — whether you trade EURUSD or gold, whether your stop is 15 pips or 150 pips away.
Here is the part most people get backwards: the rule does not tell you how many lots to trade. Lot size is the output, calculated from three inputs — balance, risk percentage, and stop distance. A wider stop produces a smaller position, and vice versa. That relationship is exactly what keeps every trade’s loss identical across very different setups.
Trading a fixed lot size is the single most common mistake. If every trade is 0.5 lots, a 20-pip stop loses $100 while a 100-pip stop loses $500. Same account, same “strategy”, five times the risk.
The position size formula
The whole calculation is three steps:
2. Loss per 1 lot = Stop in pips × Pip value
3. Position size = Risk amount ÷ Loss per 1 lot
Steps 1 and 3 are simple arithmetic. All the difficulty sits in step 2 — the pip value — and that is where most calculations go wrong.
Pip value by instrument
The pip value of one standard lot depends on which side of the pair USD sits on:
| Instrument | 1 pip | Pip value / lot | Fixed? |
|---|---|---|---|
| EURUSD, GBPUSD, AUDUSD, NZDUSD | 0.0001 | $10.00 | Fixed |
| USDJPY | 0.01 | $6.67 (at 150.00) | Moves with price |
| USDCHF | 0.0001 | $11.36 (at 0.8800) | Moves with price |
| USDCAD | 0.0001 | $7.25 (at 1.3800) | Moves with price |
| XAUUSD (gold) | 0.1 | $10.00 | Fixed |
Why are some fixed and others not? Profit and loss always arise in the quote currency — the one on the right of the pair. For EURUSD the quote currency is already USD, so no conversion is needed: 0.0001 × 100,000 = exactly $10. For USDJPY, P&L arises in yen (0.01 × 100,000 = ¥1,000) and must be divided by the USDJPY rate to reach USD — and that rate keeps moving.
That is why the calculator above only asks for the current price when you select USDJPY, USDCHF or USDCAD. The other four pairs and gold do not need it, because the result does not depend on price.
Gold is a special case
Gold causes the most confusion because people define its “pip” differently. The reliable approach is to drop pips entirely and work in price distance:
Price moves $1.00 → P&L = 100 × 1 = $100
Price moves $0.10 (1 pip) → P&L = $10
So a $5.00 stop on 0.2 lots loses 0.2 × 100 oz × $5.00 = $100. The calculator above accepts entry and stop prices directly, so you never have to convert to pips yourself.
Three worked examples
Example 1 — EURUSD, $5,000 account
1% risk, 25-pip stop.
Risk amount = 5,000 × 1% = $50
Loss per lot = 25 × $10 = $250
Position size = 50 ÷ 250 = 0.20 lots
Example 2 — Gold XAUUSD, $10,000 account
1% risk, stop $6.00 away from entry (60 pips).
Risk amount = 10,000 × 1% = $100
Loss per lot = 60 × $10 = $600
Position size = 100 ÷ 600 = 0.1667 → rounded down to 0.16 lots
Note the rounding direction: 0.1667 must go down to 0.16, not up to 0.17. Trading 0.17 lots would lose $102 — already past the 1% ceiling you set for yourself.
Example 3 — USDJPY at 149.50, $3,000 account
1% risk, 30-pip stop.
Risk amount = 3,000 × 1% = $30
Pip value = 0.01 × 100,000 ÷ 149.50 = $6.69
Loss per lot = 30 × 6.69 = $200.70
Position size = 30 ÷ 200.70 = 0.1495 → 0.14 lots
Why 1% and not 5%?
Because losing streaks are a certainty, not a rare hazard. A system that wins 50% of the time will still string together 8–10 losses in a row if you trade it long enough. Here is what remains of the account after a streak:
| Risk per trade | After 10 losses | After 20 losses |
|---|---|---|
| 1% | −9.6% | −18.2% |
| 2% | −18.3% | −33.2% |
| 5% | −40.1% | −64.2% |
| 10% | −65.1% | −87.8% |
The more important number runs the other way — recovering a loss requires a larger gain than the loss itself, and the gap widens fast:
| Drawdown | Gain needed to break even |
|---|---|
| 10% | 11.1% |
| 20% | 25.0% |
| 30% | 42.9% |
| 50% | 100% |
| 70% | 233% |
At 1%, the worst case in the first table is −18.2%, needing a 22.2% gain to recover — entirely achievable. At 10%, twenty losses leave you down 87.8% and needing 720% just to break even. That is the case for 1%: not that it grows the account quickly, but that it keeps you in the game long enough for your edge to show up.
Four common mistakes
- Choosing lot size before the stop. The correct order is the reverse: place the stop where market structure says it belongs, then size the position to fit your risk.
- Risking a percentage of the starting balance. Use the current balance. As the account shrinks, position sizes shrink with it — an automatic brake on losing streaks.
- Ignoring spread and swap. A 20-pip stop with a 2-pip spread is really a 22-pip loss, 110% of your intended risk. Hold overnight and swap adds more.
- Stacking correlated trades. EURUSD, GBPUSD and AUDUSD longs are all short-USD positions. Risking 1% on each simultaneously means roughly 3% riding on a single “USD strengthens” scenario.
How rebates change the maths
Your position size also determines the rebate you earn, because rebates are paid per lot. Two traders with the same strategy and the same 1% risk will end the month differently if one gets a portion of trading costs back and the other does not.
For an active trader this is not a rounding error: rebates accrue on volume regardless of whether a trade wins or loses. Compare rebate rates by broker to see what you may be leaving on the table.
Frequently asked questions
Yes, with one constraint: the broker’s minimum lot. A $200 account at 1% risk can only lose $2 per trade — on EURUSD with a 20-pip stop that works out to 0.01 lots, exactly the minimum most brokers allow. Below that threshold you must either tighten the stop, accept more than 1% risk, or add funds. The calculator above warns you when you hit this.
1% is the safe default for almost everyone. 2% becomes defensible once you have real statistics from a few hundred of your own trades and know your longest historical losing streak. Above 2%, most traders are gambling rather than managing risk.
Wherever market structure puts it — below the recent swing low, above the recent swing high, or outside the normal range of your timeframe — not at a round number chosen for easy arithmetic. Tightening a stop purely to justify a bigger position is the fastest route to being stopped out repeatedly.
No. It returns the theoretical size for the stop distance you enter. To be strict, add your broker’s average spread to the stop before entering it — a 20-pip stop with a 1.5-pip spread becomes 21.5.
The calculator assumes a USD account. If yours is denominated in another currency, convert the balance to USD before entering it; the resulting lot size is still correct, since lots do not depend on your account currency.
