Position sizing: from risk budget to order size
How to connect account risk, stop distance, pip/point value and broker lot steps when sizing a position.
Start with the loss budget, not the lot size
The first question is not “How many lots can I trade?” but “How much account equity am I prepared to lose if this trade fails?” On a 10,000 account, 1% is a 100 cash-risk budget.
Stop distance and size move in opposite directions
If one lot would lose 200 at the planned stop, a 100 budget corresponds to 0.50 lot. If a wider stop makes the one-lot loss 500, the same budget corresponds to 0.20 lot. Widening the stop without reducing size increases account risk.
Use the broker's contract specification
FX needs a correct pip value; XAUUSD needs contract size and value per dollar-per-ounce move; index CFDs need value per point. Verify contract size, tick size/value, minimum volume and volume step in the MT5 Symbol Specification.
Costs and rounding matter
When spread and commission are material relative to the stop, include them in the expected loss per lot. If raw size is 0.237 and the volume step is 0.01, rounding down to 0.23 is the conservative direction when the goal is to stay under the risk budget.
Check account-level constraints last
After calculating size, confirm required margin and the risk already open in other positions. The position size calculator and portfolio risk calculator address these two layers separately.
Last reviewed: 2026-08-31