Position sizing
Position size is the volume you take on a trade. It is calculated from your risk in money and the distance to your stop.
The method never changes: first set the amount you are willing to lose (for example 1% of the account), place the stop at a logical level, then divide the risk by the stop distance multiplied by the pip value.
Formula: lots = risk in money ÷ (stop in pips × pip value for 1 lot). The stop does not adapt to the size; the size adapts to the stop.
It is the most powerful tool in your risk management. Two traders with the same entries can get opposite results depending on their position size. The Analyse-Trading position size calculator saves you from calculation errors.
See also