What lot size should I use for a $100 account?

At 1% risk a $100 account can lose $1 per trade, which is less than the smallest normal trade allows: 0.01 lots with a 20-pip stop already risks $2 on EUR/USD. In practice you trade 0.01 lots with tight, chart-based stops and accept risk near 2%, or you use a cent account where smaller sizes are possible.

Is position size the same as leverage?

No. Leverage sets the largest position your broker will let you open with your deposit. Position size is the amount you choose to open. A trader with 1:500 leverage who sizes each trade to lose 1% at the stop takes no more risk per trade than a trader with 1:30 leverage who follows the same rule.

Should I calculate position size from balance or equity?

Most traders use the account balance when no trades are open. If you already have positions showing a loss, equity, which is balance plus or minus open profit and loss, is the more careful figure. A simple rule is to use whichever of the two is lower, so you never size a trade from money you may not have.

Do I need to recalculate position size for every trade?

Yes. The stop distance changes with every setup, the pip value changes with the pair and the exchange rate, and your balance changes after each result. Using the same lot size out of habit means a 60-pip stop risks three times as much as a 20-pip stop. With a calculator the sum takes under a minute.

Position Sizing in Forex: How to Calculate the Right Lot Size

Intermediate8 min read

What is position sizing in forex?

Position sizing in forex means choosing how many lots to trade so that a loss at your stop-loss costs a small, fixed part of your account, usually 1–2%. You decide the money you can lose, measure the stop distance in pips, and a formula gives the lot size. You recalculate it for every trade.

A lot is the unit of trade volume: 1 standard lot is 100,000 units of the first currency in the pair, and 0.01 (a micro lot) is 1,000 units. A pip is the smallest standard price step, 0.0001 on most pairs and 0.01 on yen pairs. Both are explained in lot sizes and order types. The guide to forex risk management introduces the 1–2% rule. This page does the arithmetic for different pairs, account currencies and account sizes.

The position size formula

Lots = risk amount ÷ (stop distance in pips × pip value per lot)

Risk amount: account balance × risk percentage. 1% of $1,000 is $10.
Stop distance: the pips between your entry and your stop-loss, the order that closes a losing trade. It comes from the chart.
Pip value per lot: what one pip is worth on one standard lot, in your account currency. On any pair with USD as the second currency (EUR/USD, GBP/USD, AUD/USD) it is $10 for a dollar account. The pip value calculator gives it for every other pair.

If your platform asks for units and not lots, the lot size converter switches between the two.

How to calculate lot size on EUR/USD: a $1,000 account

Suppose you have $1,000, risk 1%, and want to buy EUR/USD at 1.1000 with a stop at 1.0970.

Risk amount: $1,000 × 0.01 = $10
Stop distance: 1.1000 − 1.0970 = 0.0030, which is 30 pips
Pip value per lot: $10
Lots: 10 ÷ (30 × 10) = 10 ÷ 300 = 0.033

Most brokers accept steps of 0.01 lots, so round down to 0.03. Check it: 0.03 lots is worth $0.30 per pip, and 30 pips × $0.30 = $9.00, just under your $10 limit. Always round down. Rounding up to 0.04 would risk $12, which is 1.2%.

Yen pairs: converting the pip value

On yen pairs a pip is 0.01, and its value is first counted in yen. One standard lot of USD/JPY is 100,000 units, so one pip is 100,000 × 0.01 = ¥1,000. To get dollars, divide by the USD/JPY rate. Suppose, purely as an example, that USD/JPY is at 150.00. Then ¥1,000 ÷ 150.00 = $6.67 per pip per lot.

Same $1,000 account, 1% risk, 40-pip stop: lots = 10 ÷ (40 × 6.67) = 10 ÷ 266.8 = 0.037, rounded down to 0.03. Check: 0.03 × 40 × $6.67 = $8.00.

If you had used the $10 shortcut, you would have got 0.02 lots, smaller than needed. On pairs where a pip is worth more than $10, the same shortcut makes you trade too big. EUR/GBP is one: a pip is £10 per lot, which is $12.50 if GBP/USD is at 1.2500. The pip value also moves with the exchange rate, so look it up each time.

How to size a gold (XAU/USD) trade

Gold is priced in dollars per ounce, and at most brokers 1 lot is 100 ounces. A $1 move in the gold price is therefore worth $100 per lot, and you do not need pips at all:

Lots = risk amount ÷ (stop distance in dollars × 100)

Suppose you have $5,000, risk 1% ($50), and buy at a hypothetical 2,000.00 with a stop at 1,992.00, which is $8 away. Risk per lot is 8 × 100 = $800. Lots = 50 ÷ 800 = 0.0625, rounded down to 0.06. Check: 0.06 × $800 = $48. On a $1,000 account the same stop gives 10 ÷ 800 = 0.0125, so 0.01 lots and $8 of risk. Contract sizes vary, so check your broker’s contract specification. Stop distances for gold are covered in the guide to gold trading.

What if your account is not in US dollars?

The risk amount and the pip value must be in the same currency: your account currency. A pip is always valued first in the quote currency, the second one in the pair. Convert that to your account currency at the current rate.

Example: a €1,000 account risking 1% (€10) on EUR/USD with a 30-pip stop. The pip value is $10 per lot. If EUR/USD is at 1.1000, that is 10 ÷ 1.10 = €9.09. Lots = 10 ÷ (30 × 9.09) = 10 ÷ 272.7 = 0.037, rounded down to 0.03. The position size calculator does this conversion for any account currency.

Lot size for $100, $500, $1,000 and $5,000 accounts

At 1% risk, on a pair with a $10 pip value, the formula gives:

$100 account (risk $1): 20-pip stop = 0.005 lots; 50-pip stop = 0.002 lots. Both are below the 0.01 minimum.
$500 account (risk $5): 20-pip stop = 0.025, so trade 0.02 lots; 50-pip stop = 0.01 lots.
$1,000 account (risk $10): 20-pip stop = 0.05 lots; 50-pip stop = 0.02 lots.
$5,000 account (risk $50): 20-pip stop = 0.25 lots; 50-pip stop = 0.10 lots.

Notice the pattern. When the stop is 2.5 times wider, the lot size is 2.5 times smaller, and the money at risk stays the same.

What to do when even 0.01 lots is too big

On a $100 account, 0.01 lots with a 20-pip stop risks $2, which is 2%. With a 50-pip stop it risks $5, which is 5%. You have four honest options:

Skip the wide-stop trades and only take setups where 0.01 lots fits your limit.
Use smaller contract sizes. Some brokers offer cent accounts, which count your balance in cents, or sizes below 0.01 lots. Minimum deposits differ widely too; see the independent broker comparison.
Accept 2% knowingly. Ten losses in a row at 2% take about 18% of the account, against under 10% at 1%.
Add funds or stay on a demo (practice) account until the numbers work.

Fixed lot vs fixed percent vs ATR-based sizing

Fixed lot: the same size on every trade, say 0.10 lots ($1 per pip). It is easy, but your risk swings with the stop: a 20-pip stop risks $20 and an 80-pip stop risks $80.
Fixed percent: the method on this page. Every trade risks the same share of the current balance, so positions shrink during a losing run and grow with the account.
Volatility-based (ATR): fixed percent, with the stop set as a multiple of the Average True Range, a measure of how far price normally moves per candle. If ATR is 40 pips and your stop is 1.5 × ATR = 60 pips, a $10 risk gives 10 ÷ 600 = 0.0167, so 0.01 lots. If ATR falls to 20 pips, the stop is 30 pips and the size is 0.03 lots. Your size drops automatically when the market gets wild. See the ATR indicator guide.

Correlated trades, and why the stop always comes first

Two trades that move together are one risk. Buying EUR/USD and GBP/USD at the same time is largely one bet against the dollar, so split your 1% between them: $5 each on a $1,000 account. With a 25-pip stop on EUR/USD that is 5 ÷ 250 = 0.02 lots. With a 50-pip stop on GBP/USD it is 5 ÷ 500 = 0.01 lots. The guide to currency correlation shows which pairs move together.

Finally, the order of decisions never changes: chart first, stop second, size last. The wrong way round sounds like this: “I want to trade 0.10 lots and risk $10, so my stop must be 10 pips.” That stop is placed by your wallet, not by the market, and normal price noise will hit it again and again. Put the stop where the trade idea is proven wrong, as described in stop-loss strategies, and let the formula make the position small enough to afford it.

Position sizing controls how much you lose when a trade fails. It cannot make a trade win, and in fast markets or after a weekend gap a stop-loss can be filled at a worse price, so the real loss can be larger than planned. Forex and CFDs carry a high risk of loss. Only risk money you can afford to lose.