How to calculate forex lot size
Learn the position size formula using account balance, risk percentage, stop loss and pip value.
What is lot size?
Lot size is the trade volume you choose. In forex, it controls how much each pip movement affects your account.
The position size formula
Lot size = money at risk / (stop loss in pips x pip value per lot)
If your account is $1,000 and you risk 1%, your money at risk is $10. With a 50 pip stop loss and $10 pip value per standard lot:
Lot size = 10 / (50 x 10) = 0.02 standard lots
Why beginners often get it wrong
Many new traders pick lot size first, then search for a stop loss. That reverses the process. The safer order is:
What changes by instrument
Pip value can differ between currency pairs, gold, indices and crypto CFDs. XAUUSD lot sizing is not the same as EURUSD lot sizing.
Use a calculator
Use the Social Forex trading calculator to estimate lot size before placing a trade. Recheck contract details with your broker because specifications can vary.
Content is for reference only, not investment advice. Forex trading carries high risk.
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