This calculator works out how large a forex position can be if you want to lose a set share of your account when the stop-loss is hit. It handles dollar pairs, yen pairs and crosses, and accounts held in seven currencies. Everything runs in your browser, so the numbers you type are not sent to us or anyone else.
How to use it
Start with your account currency and balance, then the percentage of the account you are prepared to lose on this one trade. Pick the pair and enter the distance from your entry to your stop-loss in pips.
Watch the units on that last field. Most platforms quote prices to five decimal places (three for yen pairs), and MetaTrader calls each of those smallest steps a point. Ten points make one pip, so a stop that your platform shows as 250 points away is a 25-pip stop.
Sometimes an extra field appears asking for a current exchange rate. That happens when the pair’s quote currency is different from your account currency, for example USD/JPY or EUR/GBP traded from a dollar account. The calculator needs that rate to turn the pip value into your currency. Take it from your trading platform, since rates move all day and a stale figure gives a wrong answer.
What the results mean
Position size is the result you will type into the order ticket, rounded down to the nearest 0.01 lot because most brokers accept sizes in those steps. Rounding down keeps you at or under the risk you chose. The note under the results shows the exact amount at risk after rounding.
Units of base currency is the same position expressed without lots. A 0.40-lot EUR/USD trade is a position of 40,000 euros.
Amount at risk is the balance multiplied by your risk percentage.
Pip value per standard lot is what one pip is worth on 100,000 units of the pair, in your account currency. Our guide to calculating pip value by hand explains where that number comes from.
Why traders keep risk per trade small
Many trading courses recommend risking 1% to 2% of the account per trade. That figure is a convention, and the arithmetic of losing streaks shows where it comes from. Here is how much of the account is gone after a run of consecutive losing trades, assuming each trade risks a fixed share of the current balance:
| Risk per trade | After 5 losses | After 10 losses | After 20 losses |
|---|---|---|---|
| 1% | -4.9% | -9.6% | -18.2% |
| 2% | -9.6% | -18.3% | -33.2% |
| 3% | -14.1% | -26.3% | -45.6% |
| 5% | -22.6% | -40.1% | -64.2% |
Ten losses in a row sounds unlikely until you trade a strategy that wins 40% of the time. Over a few hundred trades, a streak like that is quite possible.
Getting back from a drawdown also takes more than the loss itself. A 20% drop needs a 25% gain to recover. A 40% drop needs 66.7%, and a 50% drop needs 100%.
What the calculator cannot account for
The result assumes you exit exactly at your stop. In a fast market, or when prices gap over a weekend or after a central bank surprise, a stop order is filled at the next available price, which can be much worse. The Swiss franc shock of January 2015 is the classic example.
Spreads and commissions also come on top of the stop distance. On a tight stop, a 1.5-pip spread is a meaningful slice of the risk, so some traders add it to the stop distance before calculating.
Finally, the pip value for any pair quoted in a currency other than your own changes as exchange rates move. Recalculate before each trade instead of reusing an old lot size.
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