Position Size Calculation

Learn Position Size Calculation — part of our Risk Management series on Trading Bite. Free trading education for Pakistan, India & Gulf traders. Educational use only; not financial advice.

· 3 min read

How many lots / shares?

Basic formula:

Position size = Account risk ÷ (Stop distance × value per pip/point)

Example (forex): Account $10,000, risk 1% = $100. Stop = 50 pips on EUR/USD. Standard lot pip value ≈ $10/pip (verify on your broker). Risk per pip for 0.1 lot ≈ $1. Need $100 ÷ 50 pips = $2/pip → roughly 0.2 lots (always confirm with broker calculator).

$ Risk÷Stop (pips) × pip value=LotsUse broker margin / position size calculator to double-check.

Never guess lot size. MT5: Tools → Options → or use built-in position size scripts/indicators.