Position sizing converts 'I risk 1% per trade' into an exact lot size. The formula:

Lots = (Account balance x Risk %) / (Stop-loss in pips x Pip value per lot)

Worked example (EURUSD)

  • Account: $10,000, risk 1% = $100
  • Stop-loss: 25 pips
  • Pip value for 1.0 lot EURUSD: $10

Lots = 100 / (25 x 10) = 0.40 lots

Worked example (Gold / XAUUSD)

Gold's pip value differs by broker convention — commonly $1 per 0.01 lot per $0.10 move ($10 per 1.0 lot per $1.00 move). With a $5.00 stop on gold risking $100: Lots = 100 / (5.00 x 10 x 2)... conventions vary, which is exactly why you should verify with a calculator instead of memorizing one number. Use our free lot size calculator and pip calculator.

Rules of thumb

  • Risk a fixed percentage, not a fixed lot size — position size then scales down automatically in a drawdown.
  • Wider stop = smaller position, same dollar risk. Never widen a stop without recalculating size.
  • For prop firm challenges, 0.5–1% per trade keeps ten-loss streaks survivable.

Automated EAs should do this on every trade. Apex Drawdown Zero sizes positions from your configured risk percent and the trade's actual stop distance, so risk stays constant across symbols and volatility regimes.