Position size calculator and risk tools for traders

The formula behind it

Position size starts from the risk, not from the market. First decide the risk amount: account balance multiplied by the percentage you are willing to lose on one trade. Then measure the distance between your entry and your stop. Divide the risk amount by the value of that distance for one lot or unit, and the result is the size that loses about your risk amount if the stop is hit.

A worked example, with made-up numbers for illustration only: with a 10,000 account and a 1 percent risk, the risk amount is 100. If the stop is 20 pips away and one pip is worth 10 for a standard lot, the size is 100 divided by 200, which is 0.5 lots. If the stop were 40 pips away, the same 1 percent would give 0.25 lots. A wider stop means a smaller position, so the loss stays the same.

What the Money Circle calculators include

The calculators page is a set of tools that run in your browser. You type numbers in and read results out; nothing is sent to a broker.

• A guided setup in five steps: instrument, your trade, account and risk, contract details and an overview. It covers major currency pairs, gold, oil, silver, Bitcoin, Ether and a few indices, and can load live prices.
• A position size calculator: balance, risk percentage, stop distance and pip value give the risk amount and the size in lots.
• A risk-to-reward calculator: entry, stop and target give the ratio of the potential reward to the risk.
• A profit and loss calculator, a pip value tool and a margin calculator for checking leverage.

Choosing the risk percentage

There is no correct percentage, and anyone who gives you one without knowing your account, your strategy and your tolerance for drawdown is guessing. What matters is that it is small enough to survive a losing streak, written down and respected. Many traders choose a small single-digit percentage or less. Test the choice by asking what ten consecutive losses would do to your account and to your composure.

The risk management lessons in the academy (Day 13) go into drawdown math, R-multiples and expectancy. Leverage and margin do not change the rule: they decide how much money your broker requires to hold the position, not how much you should risk.

Limits of any calculator

A calculator is only as good as its inputs. Pip values, contract sizes, spreads, commissions and slippage differ by broker and instrument, so treat the output as an estimate and check it against your platform's own specifications before you trade. Results are educational estimates, not advice, and they cannot see gaps or fast markets, where a stop may be filled at a worse price than planned.

Where to find them

The calculators are in the member area. Registering is free and starts you on the Starter plan; the pricing page lists what each plan includes. They sit next to the journal, so you can size a trade, take it and log the result in one place.