Currency pair: Select your tradable instrument. For example USD/CAD.
Deposit currency: The account base currency is important to assess the ideal lot size, as it takes into consideration the pip value and the market rate of the selected cross. We choose USD as our deposit currency, for this example.
Stop loss (pips): Traders should input the maximum number of pips they are willing to risk in a trade, to protect the account equity in case the market goes against their position. For this example 100 pips.
Account balance: Traders need to input their account equity. For example 100,000
Risk: For our example we will select 2% risk.
Now, we hit the “Calculate” button.
The results: The Position Size and Risk Calculator uses a market price live feed with the current interbank rate (in a 5-digit format) and it will display the selected currency pair price (USD/CAD).
In this case, using a stop loss of 100 pips and risking 2% of our account equity, the recommended lot size would be 0.25 lot.
Next, the calculator displays the amount of units that 0.25 lot represents 25,000 units and finally the portion of the account equity at risk, or the value of the position, in this case 200 USD.