A lot size calculator answers one question: given how much money you are willing to lose on this trade and where your stop sits, how large should the position be? Everything else on a trading screen is opinion. This is arithmetic, and getting it wrong is the fastest way to turn a normal losing streak into a closed account.
Account balance, risk percentage and stop distance. The risk percentage converts to a cash figure — 1% of a $2,000 account is $20 — and the stop distance is measured in the instrument's own units: pips in forex, price in crypto and stocks, ticks in futures. Position size is the cash risk divided by the stop distance multiplied by the value of one unit of movement.
In forex a standard lot moves $10 per pip on most USD-quoted pairs, a mini lot $1 and a micro lot $0.10. So $20 of risk with a 20-pip stop allows $1 per pip, which is one mini lot. The same $20 with a 50-pip stop allows $0.40 per pip — four micro lots. The stop distance, not the confidence level, sets the size.
Crypto: risking $30 on BTC with an invalidation $600 below entry allows 0.05 BTC. Notice that the dollar exposure is large while the risk is small, which is exactly the point — volatility is absorbed by size, not by hope. Stocks: $50 of risk with a $2.50 stop is 20 shares, regardless of how good the setup looks.
Leverage does not appear in any of these calculations, and that is deliberate. Leverage determines the margin your broker holds, not the money you can lose. Traders who size by leverage rather than by stop distance end up with a position whose loss they never chose.
Sizing first and placing the stop afterwards, which guarantees the stop lands where the size is comfortable rather than where the idea fails. Ignoring the quote currency on cross pairs, where pip value is not $10 per standard lot. Forgetting that several open positions in correlated pairs are one larger trade — EURUSD long and GBPUSD long at 1% each is closer to a single 1.8% position.
Safabot's position size and pip value calculators are free, need no account, and handle the quote-currency conversion for forex crosses, so the number you get is the size to actually enter.
One percent of the account or less while learning. At 1%, ten consecutive losses cost under 10% of the account; at 5% the same streak is close to half of it.
No. Leverage sets the margin held by the broker. The size is set by your cash risk and your stop distance, and those two numbers alone.
Yes — the units differ but the formula is identical: cash risk divided by stop distance gives units, coins or shares.