Don’t waste your time – keep track of how NFP affects the US dollar!

Data Collection Notice

We maintain a record of your data to run this website. By clicking the button, you agree to our Privacy Policy.

facebook logo with graphic

Join Us on Facebook

Stay on top of company updates, trading news, and so much more!

Thanks, I already follow your page!
forex book graphic

Beginner Forex Book

Your ultimate guide through the world of trading.

Get Forex Book

Check Your Inbox!

In our email, you will find the Forex 101 book. Just tap the button to get it!

FBS Mobile Personal Area

market's logo FREE - On the App Store

Get

Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

76.5% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider.

You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

LESSON 20. Position size, level of risk

Imagine you put $1000 on your deposit and you want to trade…

Imagine you put $1000 on your deposit and you want to trade. Should you use the entire sum at once?

Probably not: remember how we spoke about risk management? So, which position size to choose then?

Step 1. Don’t risk more than 1-2% of your deposit for one trade. This way even if some of your trades aren’t successful, you won’t lose all your money and will be able to keep trading.

For example, if you deposit is $1,000, risk no more than $10 (1% of account) on a single trade.

Step 2. Establish where the stop loss will be for a particular trade. Then measure the distance in pips between it and your entry price.

This is how many pips you have at risk. Based on this information, and the account risk limit from step 1, calculate the ideal position size.

For example, you want to buy EUR/USD at 1.1100 and place a stop loss at 1.1050. The risk on this trade is 50 pips, and you can risk $10.

Step 3. And now you determine position size based on account risk and trade risk. Remember that there are different lot sizes.

A 1000 lot (micro) is worth $0.1 per pip movement, a 10,000 lot (mini) is worth $1, and a 100,000 lot (standard) is worth $10 per pip movement.

This applies to all pairs where the USD is listed second, for example, the EUR/USD. If the USD is not listed second, then these pip values will vary slightly.

Note that trading on a standard lot is recommended only for professional traders.

Use the formula you see on your screen.

Assuming that we have a 50-pip stop in the EUR/USD, use the following formula for the size of the position.

The position size is in micro lots because the pip value used in the calculation was for a micro lot.

For the number of mini lots use $1 instead of $0.1 in the calculation, to get 1 mini lot. Here’s the formula.

The pips at risk will often vary from trade to trade, so your next trade may only have a 20 pip stop. Use the same formula.

 

 

 

 

 

Choose your payment system

Feel the Team Spirit

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later