Utilizing the separation between your starting point and your stop misfortune is the best method to decide the greatest hazard sum. Dealers can tailor their situations to remain predictable with their most extreme decent misfortunes, for instance by decreasing the position size if the stop is farther.

To estimate a position, you have to know:

  • How many sizes you need to exchange
  • What level of your money you are eager to chance
  • What is the separation between the section cost and the stop misfortune for each exchange
  • What is the pip esteem per a standard lot of the currency pair exchanged

Envision that you have a record with 10,000 US dollars and you are prepared to lose 2% in an awful exchange. You are thinking about a situation on the USD/JPY and the stop misfortune for that exchange is set a ways off of 50 pips. The present pip esteem per standard lot is 9,85 US Dollars. You are currently prepared to ascertain your position’s size by utilizing the formula:

Position size = ((account esteem x risk per exchange)/pips risked)/pip esteem per standard lot

((10,000 US Dollars X 2%)/50)/9.85 = (200 USD/50 pips)/9,85 = 4 USD/9,85 USD= 0.40 standard parcels (4 scaled down parts or 40.000 cash units)