How do I calculate lot size for 1% risk per trade?

Question

Everyone says to risk 1% per trade, but nobody shows how to turn that into a lot size. Can someone explain with an example?

Ayesha Rahman · Accepted Answer

Use this formula:

Lot size = (account balance x risk %) / (stop loss in pips x pip value per lot)

Example on EURUSD: balance $1,000, risk 1% = $10, stop loss 20 pips, pip value about $10 per standard lot.

Lot size = 10 / (20 x 10) = 0.05 lots

So you would trade 0.05 lots (5 micro lots). Most brokers and many free tools have a position size calculator that does this for you. Check the pip value for your pair and account currency before you rely on it.

Marcus Lindqvist · Answer

For gold and indices, check the contract size, because one lot is not the same as in forex. Always enter the exact stop distance in price instead of "a few pips".

How do I calculate lot size for 1% risk per trade?

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