Forex & Trading Calculation Guides

Position size (lots) = (Account balance × Risk %) ÷ (Stop loss in pips × Pip value per lot). For example: $10,000 account risking 1% with a 20-pip stop on EUR/USD = ($10,000 × 0.01) ÷ (20 × $10) = 0.5 lots. The position size calculator on TradeCalc does this in one step for any pair.

The 1% rule means never risking more than 1% of your account on a single trade. On a $10,000 account that is $100 at risk per trade. Combined with a fixed stop loss in pips and the pip value for your pair, the 1% rule determines exactly how many lots to trade. It is the foundation of professional position sizing.

Risk/reward ratio (R:R) compares how much you risk on a trade versus how much you stand to gain. A 1:2 R:R means risking $100 to make $200. You need a win rate above 33% to be profitable at 1:2. Combining your R:R with your actual win rate — using the win rate calculator — tells you your expected value per trade before you even open a position.

Margin is the deposit your broker requires to open a leveraged position. Required margin = (Lot size × Contract size × Current price) ÷ Leverage. On EUR/USD at 1.0850 with 1 standard lot (100,000 units) and 1:100 leverage: margin = (100,000 × 1.0850) ÷ 100 = $1,085. The margin calculator handles this for all pairs and leverage settings.

A trailing drawdown means your account floor rises as your balance rises — but never falls back down if your balance drops. If you start at $100,000 with a 5% trailing drawdown ($5,000), your floor starts at $95,000. If you grow to $105,000, the floor moves up to $100,000 and stays there even if you lose money. The trailing drawdown calculator tracks your real-time floor so you always know your safety margin.