Module 1 of 3The arithmetic of riskLesson 2 of 8
Calculating the position size
Account, risk percentage and stop distance to a lot size.
Position size = (account × risk %) ÷ (stop distance × value per unit).
A 10,000 account risking 1% accepts a 100 loss. If the stop sits 50 pips away and each pip is worth 1 per micro lot, the size is 100 ÷ 50 = 2 micro lots. Move the stop to 25 pips and the same 100 buys 4 micro lots; move it to 200 and it buys half of one.
Notice what this does: a wider stop does not increase your risk, it reduces your size. Traders who keep the size fixed and widen the stop have quietly doubled their risk while believing they were being careful.
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