Position Size Calculator

Capital Preservation

Proper position sizing is the cornerstone of risk management. By limiting the amount you risk on any single trade, you preserve your capital for future opportunities and protect against catastrophic losses.

A trader who risks 1% per trade can sustain 100 consecutive losses before losing their entire account. A trader risking 10% can only handle 10 losses.

The 1% Rule

The 1% rule is the gold standard in professional trading: risk no more than 1% of your account on any single trade.

This approach allows you to take multiple losses in a row while still having capital to trade. Even with a 50% win rate, consistent 1% position sizing leads to long-term account growth.

• 1% risk: survive 100 losses in a row
• 2% risk: survive 50 losses in a row
• 5% risk: survive 20 losses in a row

Position Size Formula

For pairs where USD is the quote currency (most majors):

Where position size is in units, and lots = units / 100,000

For JPY pairs, the formula adjusts for the 100x difference in pip value.

Common Mistakes

• Increasing risk after losses (chasing)
• Not accounting for pip value differences
• Using account balance instead of account equity
• Inconsistent risk across different currency pairs
• Ignoring slippage and swap costs
• Not adjusting position size as account grows