# Curexmy

Let's Make The Market Safe

# How To Calculate Lot Size According To Equity

It’s pretty simple no need to stuck and getting into complexities as a forex retail trader so let’s see in this post how to calculate and understand in a short way, what is lot sizes in forex trading? & how to calculate lot sizes according to currency pairs and account sizes that’s your equity aka account balance to trade.

## Lot Size

The lot size is the most important aspect of forex trading if you are a beginner trader or still learning how to trade forex without understanding lot sizes according to your equity is just like you are doing money management without using math and just guessing the numbers without parameters exactly so it’s important to know exactly what is it and how to calculate it.

It doesn’t matter on which platform you are trading the order volume selection is classically the same idea of choosing how much units you are willing to sell or buy for a particular pair. Let’s understand simply using the market king terminal/software trading platform called MT4/MT5 Meta trader 4/5 by Metaquotes Software Corp can be easily usable on android, IOS, Windows & Mac.

There are Three Types of Popular Lots Standards Following which can Clarify the General Concept.

To simply calculate the lot size you should take it just clarified with the formula of equity multiply by percentage of risk you are willing to take and divided by the pips you are gonna setup the stop-loss which will identify the position size or lot size for your trade(To identify the margin you required for remains opening your trade while a position is against you until it goes to your favor or hit stop-loss) to understand more clearly here is the example below.

EquityÃ—%Risk/No. Pips = Lot size

Let’s take a fictionary Account of USD currency having the Account balance/equity of \$100 and ideally and preferred risk tolerance should be on per trade is more than enough and seasoned approach is 1-2% and we take the high percent and take 2% of risk which will be in the amount \$2 and which mean I am ready to lose \$2 if my trade goes wrong which will be worse case scenarios hit stop loss.

Now, what should by using the rule to calculate lot size by dividing the \$2 on the number of pips where my stop loss will trigger which is for example currently EURUSD is on a price 1.18333 and I am gonna buy it at this exact price and my stop loss will be exactly below the price of 1.18161 just below the hourly support and which give me 172 pips stop loss so to know the exact lot size I should divide the amount of risk \$2 on the numbers of pips which will be calculated as equals to 0.0116279069767442 and the final lot size will be simple As Micro Lot 0.01 can be taken On my account as a good money management rule.