How the calculation works
Risk budget = balance × risk percentage. Position in lots = risk budget ÷ (stop loss in pips × pip value of one lot). Units = lots × units per standard lot.
Worked example
A $10,000 account risking 1% has a $100 risk budget. With 40 pips to the stop and $10 per pip for one lot, the calculated position is 0.25 standard lots, or 25,000 currency units when one lot equals 100,000 units.
How to interpret the output
- The risk budget is the theoretical loss at the stop level before slippage and fees.
- You must verify contract size, pip value and minimum trade increments for the specific instrument.
- A stop-loss does not guarantee execution at the stop price.
Important limitations and assumptions
- This tool does not obtain live exchange rates; account-currency conversions are your responsibility.
- Pip conventions differ for JPY pairs, metals and brokers.
- Actual losses can exceed the chosen risk due to gaps, costs and execution.
Important: This is a transparent arithmetic illustration, not a trading forecast. Live spreads, execution, broker rules and investor protections can affect actual outcomes.