Position sizing
The only formula that matters
Decide the euro amount you are willing to lose, then let the stop distance determine the size — never the other way round.
Position size = risk amount ÷ (stop distance in pips × pip value)
Risking €200 with a 40-pip stop on EUR/USD, where a standard lot is ~$10 a pip: 200 ÷ (40 × 10) = 0.5 lots.
Risking €200 with a 40-pip stop on EUR/USD, where a standard lot is ~$10 a pip: 200 ÷ (40 × 10) = 0.5 lots.
- Fix the risk, flex the size
One percent of equity per trade keeps a losing streak survivable.
- Include the spread in the stop
A 10-pip stop on a 1.6-pip spread is really a 11.6-pip stop.
- Recalculate when equity changes
One percent of a smaller account is a smaller number — that is the point.