Position size from a monetary risk

Lesson 4 of 4 · about 10 minutes

4 questions, each checked the moment you answer it.

5 steps · about 10 minutes

The interactive lesson walks these ideas one screen at a time and checks your answers as you go. The text below covers the same ground for reading.

Turn your risk limit into a lot size

Five steps combine the risk amount, the stop distance and the pip value into a number of lots: lots = risk amount ÷ (stop in pips × pip value per 1.00 lot). Only the first of the three is a number you chose yourself. Next, use the same five steps on other pairs, and then on gold.

Previous lesson: Stop-out