What is position sizing in trading?

Position sizing determines how many units (lots) of an instrument you should trade based on your account size, risk tolerance, and stop loss distance. It ensures you never risk more than a predetermined percentage of your account on any single trade.

What is the 2% rule in trading?

The 2% rule suggests never risking more than 2% of your trading account on a single trade. For a $10,000 account, this means your maximum loss per trade should be $200.

How do I calculate lot size for forex?

Lot size = (Account Balance x Risk %) / (Stop Loss in Pips x Pip Value). For example, with a $10,000 account, 2% risk, and 50-pip stop loss: ($10,000 x 0.02) / (50 x $10) = 0.04 standard lots.

What is the difference between standard, mini, and micro lots?

A standard lot is 100,000 units. A mini lot is 10,000 units (0.1 standard). A micro lot is 1,000 units (0.01 standard). Most retail traders use micro lots for precise risk management.

free tool

Position Size Calculator

Risk-based lot sizing for forex, metals, indices, and crypto. 27 instruments, 7 account currencies, price levels or pips mode.

Instrument

Direction

Account Currency

Balance

Risk

= $100.00

Stop Loss & Targets

Entry Price

Stop Loss Level

Take Profit (optional)

Estimates based on standard pip values. Verify with your broker before placing trades.

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