Calculate your position size and trade seriously

Position size is the number of lots or units you trade on a single position. It determines how much a trade can win or lose, linking your Stop Loss with the amount you are willing to risk. Below, you will learn how to calculate it and how our Position Size Calculator does it for you.

One of our main goals in serving our clients, besides educating them, is to improve their trading habits, especially in the area of risk management and money management. Any trader who wants to be profitable in the long term should be clear about how much money he can use for a trade, how much risk he will take and how large his position will be before entering a position.

After offering traders two calculators a year ago that allow them to calculate the required margin per trade and the value of their position, we are expanding our offer with a new Position Size Calculator.

In addition, we have also unified the design of all three calculators to make it easier for our clients to navigate when they need to calculate the aforementioned important parameters when opening a position. Our traders now have a comprehensive solution in one place. Of course, we also offer language localization in all languages offered by today’s version of our website and trader environment.

Know your position size

Every trader should have a clear idea of how big their position will be before entering a position to meet their money management rules. Of course, the basic premise is that the trader should have these rules clearly set out within their strategy and not change them during the course of trading, otherwise the rules stop protecting the account.

Position Size Calculator

Our Position Size Calculator allows the trader to calculate the position size in lots on the symbol of their choice and in the currency of their account. It is particularly suitable for traders who have a clearly defined amount they are willing to lose per trade. Imagine a trader with a well-prepared setup: they know the level where they want to enter, where they expect the price to go, and the level at which the trade is no longer valid and should be closed.

They are willing to risk 0.5% of the account balance, which on a 100,000 USD account is 500 USD. The only thing left to work out is the position size at which a loss at the planned Stop Loss level would equal that amount. (Keep in mind that a Stop Loss does not guarantee execution at the exact price, and slippage may cause the actual loss to be different.)

All the basic parameters such as the currency of the trader’s account, the entry price, the Stop Loss (the price at which he wants to exit a trade that has failed) or the amount he wants to risk can of course be changed according to the trader’s needs. The calculator is available for all symbols/instruments that can be traded on FTMO platforms and is designed for all types of traders, from scalpers to swing traders.

How to calculate position size

Position size is calculated from the amount you are willing to risk, the distance to your Stop Loss and the value of one pip for your instrument. The formula is:

Position size (lots) = risk amount / (Stop Loss distance in pips x pip value per lot)

For example, you risk 100 USD on EURUSD, enter at 1.1100 and place your Stop Loss at 1.1050, which is 50 pips away. One pip on a standard lot is worth about 10 USD, so your position size is 100 / (50 x 10) = 0.20 lots. With a Stop Loss 100 pips away, the same risk gives 0.10 lots.

You can skip the manual maths. Enter your maximum loss, entry price and Stop Loss into the FTMO Position Size Calculator and it returns the position size for you.

Common position-sizing mistakes

These mistakes are common, and a position size calculator helps you avoid several of them:

• Trading the same lot size regardless of Stop Loss distance. A wider Stop Loss needs a smaller position to keep your risk the same.
• Ignoring pip value. One pip is worth a different amount on each instrument, so the same lot size carries different risk.
• Changing size after a loss to win it back. Your size should follow your plan, not your emotions.
• Ignoring your account currency. The pip value must be converted into the currency of your account.

Applying the same sizing rules on every trade is also what builds your Discipline Score. Read how much to risk on one trade, then practise it risk-free with the FTMO Free Trial.

Our trading calculators aim to make it easier for traders to calculate the basic parameters they need when opening their positions. If you are serious about trading and consistently follow the rules of money management, using them is almost a must. You can find them in the left panel of your Client Area under Tools & Services. Trade safely!