Position Size Calculator: Risk-Based Lot Sizing Workflow
Why this page matters
Position sizing is the control layer between a good idea and survivable execution.
{ Pre-execution checklist }
Risk amount is fixed before chart decision.
Stop-loss is structure-based.
Pip value verified for symbol/account currency.
Final lot rounded down to broker increment.
Margin check passed with volatility buffer.
Calculation logic and practical workflow
Use formula: Lot Size = Risk Amount / (Stop Loss Pips × Pip Value per 1 lot).
If equity is 10,000 and risk is 1%, then risk amount is 100.
If stop is 25 pips and pip value is 10 USD, lot = 100/(25×10)=0.40.
Convert pip value when account currency differs from quote currency.
Round down to broker lot step to avoid over-risking.
Check margin impact after lot calculation.
Run stress scenario with wider spread and volatility.
Write all sizing assumptions into trade journal.
Common mistakes to avoid
Sizing from balance instead of equity during drawdown.
Selecting lot before defining technical stop.
Ignoring symbol-specific pip conventions.
Increasing lot to compensate for poor setup quality.