How to calculate position size with 0.5% risk per trade

By World Macro News · Updated 2026-10-26

Position sizing decides how much you lose when a trade is wrong. Every trade idea on this site assumes a risk of 0.5% of the account per trade. At that size, ten losing trades in a row cost about 5% of the account, which keeps a bad run survivable.

The formula

Position size = (account × risk %) ÷ (stop distance × value per unit of price move)

1. Work out how much money you are willing to lose: account balance × 0.5%.
2. Decide where your stop-loss goes before sizing, based on the chart, not on how much you want to make.
3. Measure the distance from entry to stop.
4. Find how much one lot gains or loses per unit of that distance on your broker's contract.
5. Divide the money at risk by the loss per lot at the stop.

Example 1: EUR/USD

These numbers are an example only. On most brokers one standard lot of EUR/USD is 100,000 euros, and a move of one pip (0.0001) is worth about $10 per lot.

• Account: $10,000. Risk: 0.5% = $50.
• Stop distance: 25 pips. Loss per lot at the stop: 25 × $10 = $250.
• Position size: $50 ÷ $250 = 0.20 lots.

Example 2: gold (XAU/USD)

Again an example only. On many brokers one lot of gold is 100 troy ounces, so a $1 move in the gold price is worth $100 per lot.

• Account: $10,000. Risk: 0.5% = $50.
• Stop distance: $10. Loss per lot at the stop: 10 × $100 = $1,000.
• Position size: $50 ÷ $1,000 = 0.05 lots.

Contract sizes differ between brokers and between spot, futures and CFD products, so always check the "contract specification" page of your own broker before using these numbers.

Common mistakes

• Moving the stop to fit a bigger size. The stop comes from the market; the size comes from the stop.
• Ignoring spread and slippage. Around big news the spread can widen and stops can fill worse than planned, so the real loss can exceed 0.5%.
• Stacking related trades. Long gold, short USD/JPY and short USD/CHF are all partly a bet against the dollar. Three trades at 0.5% each can behave like one trade at 1.5%.

The dashboard has a position size calculator next to each trade plan, and every plan is graded afterwards on the track record page.

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• What moves the gold price (XAU/USD): the main drivers explained
• What moves crude oil prices (WTI): supply, demand and the weekly data
• Trading the news in forex: what happens when data beats or misses

Market information only, not financial advice. Trading forex, gold, oil, crypto, stocks and CFDs carries a high risk of loss. Research is gathered by AI from the linked sources and can contain mistakes; check the source. Prices are snapshots with the time shown. Risk disclaimer.