The position-size calculator: the most important number before every trade

Most blown accounts died not of bad analysis — of bad sizing. Correct size comes from three inputs.

The three inputs

1. Tolerable risk: the maximum this trade may lose (from your total capital and personal rule).
2. Stop-loss distance: how far is the price that proves the idea wrong from your entry?
3. Value per unit of movement: the dollar value of each pip or tick for that symbol and size.

The result

Size = risk ÷ (stop distance × movement value). The position-size calculator computes it for you — manual error is exactly where sizes double by mistake. For the wider picture, read the risk guide too.

Frequently asked questions

Why does manual sizing go wrong? Because the mind mishandles pip-value arithmetic in the heat of the moment. The tool computes the same thing without errors.

What is a personal risk rule? A written number: “I never risk more than X per trade”. Without it, even the calculator is useless.

Is the size the same for all symbols? No; pip value and movement range differ per symbol. Compute each separately.

Should I enter the calculator’s suggested size verbatim? The calculator gives the mathematical number for your risk; rounding to the symbol’s allowed lot step is yours. If the suggestion does not fit the minimum size, take the nearest allowed value — and if your stop distance is so tight it produces an astronomical size, the problem is the stop, not the calculator.

Summary

Size is the most important number under your control. Tool: the position-size calculator; the logic: the risk guide.

The three position-size inputs

• The tolerable risk for this trade
• The stop-loss distance from entry
• The value per unit of movement in that symbol
• Size = risk ÷ (distance × value)
• Write your personal rule down

The position-size calculator: See it.