How to Calculate Lot Size in Forex (With Examples)
Lot size decides how much a losing trade costs you. Pick your risk first, then let the stop loss and the pair decide the size, never the other way round.
The formula
Lot size = (account balance × risk %) ÷ (stop loss in pips × pip value per lot)
Three inputs are yours: balance, risk percentage and stop loss. The fourth, pip value, depends on the pair and on the currency your account is held in.
Pip value per lot
One standard lot is 100,000 units of the base currency. A pip is 0.0001 on most pairs and 0.01 on yen pairs. Multiply the two and you get the pip value in the quote currency (the second one in the pair):
- EUR/USD: 100,000 × 0.0001 = 10 USD per pip
- USD/JPY: 100,000 × 0.01 = 1,000 JPY per pip
- EUR/GBP: 100,000 × 0.0001 = 10 GBP per pip
If the quote currency is your account currency, you're done. If not, convert it at the current exchange rate.
Example 1: EUR/USD on a USD account
- Balance $10,000, risk 1% = $100
- Stop loss 20 pips, pip value $10 per lot
$100 ÷ (20 × $10) = 0.50 lots. If the stop is hit you lose $100. Try it in the EUR/USD lot size calculator.
Example 2: USD/JPY on a USD account
- Balance $10,000, risk 1% = $100
- Stop loss 25 pips, pip value ¥1,000 per lot
- USD/JPY at 150.00, so ¥1,000 = $6.67
$100 ÷ (25 × $6.67) = 0.60 lots. The pip value moves with the exchange rate, so the same stop can need a slightly different size next week. The USD/JPY calculator uses the latest rate for you.
Example 3: EUR/USD on a GBP account
The pip is still $10 per lot, but your risk is in pounds. With GBP/USD at 1.25, $10 is £8.
- Balance £10,000, risk 1% = £100
- Stop loss 20 pips at £8 per pip
£100 ÷ (20 × £8) = 0.625, rounded down to 0.62 lots. Always round down: rounding up means risking more than you planned.
Mistakes that break the math
- Points instead of pips. Most platforms quote 5 decimals (3 on yen pairs). The last digit is a point, and 10 points make a pip. A "200" stop in points is 20 pips. See pips vs points.
- Wrong account currency. A EUR or GBP account gets a different answer than a USD one on the same trade.
- Sizing by feel. 0.5 lots on EUR/USD and 0.5 lots on GBP/JPY are very different risks.
Skip the arithmetic
The free position size calculator does this for 38 forex pairs plus gold, indices and crypto, in 16 account currencies. If you trade several accounts, the Forexizer Calculator app sizes one setup for all of them at once.