The calculator works out the volume you can afford to trade given a cash risk and a fixed stop-loss. For example, if you want to risk $200 on EUR/USD with a stop-loss at 50 pips, then the calculator will establish that you should be trading 0.40 lots / 40K.
- You define the amount to risk either as a fixed cash amount, such as $100, or as a percentage of an equity figure.
- You then choose the market you are trading, and a stop-loss which can be entered either as a number of pips, such as 50, or as the corresponding offset amount, such as 0.0050.
- The calculator then shows you the corresponding trade size for achieving that cash risk, as both a number of lots, such as 0.40, and also a notional volume, such as 40K.