How to Calculate Position Size on a Funded Account

You need to turn your planned risk into a lot size before you place a trade. MT5 asks for a lot size, not a percentage. The formula is short, but the stop distance and the pip or point value change by market. Here is how to run the calculation for forex, gold, and indices. Then check that the combined risk still fits inside a funded account’s drawdown limits.

Key Terms, Minus the Jargon

Term	What It Means
Position size	How many lots you trade. This controls what each pip or point is worth.
Pip value	What a one-pip move is worth, in your account currency.
Lot size	The order-ticket unit. In forex, one standard lot usually represents 100,000 units of the first currency.
Dollar risk per trade	The planned loss if the stop is filled at its set price, before costs or slippage.
Stop loss distance	The gap between the entry and the stop, measured in pips, points, or price units.

Three Numbers Turn Your Risk Into a Lot Size

Position size in lots = Dollar risk per trade ÷ (Stop distance in pips × Pip value per standard lot)

• Dollar risk per trade. This is your chosen risk percentage, turned into money. On a $100,000 funded account, a 1% risk equals $1,000 in dollar risk. The same formula works with any percentage.
• Stop loss distance. Measure the gap between your planned entry and your stop. A wider stop gives you a smaller lot size, if the dollar risk stays the same.
• Pip or point value. On EURUSD in a USD account, one pip is worth $10 per standard lot. Gold and indices use different contract specifications. Do not carry the EURUSD value across to them.

Set your stop from the trade setup first, then calculate the lot size. Choosing the lot size first reverses the calculation.

One Formula, Three Different Markets

The calculation stays the same whether you trade forex, gold, or NAS100. What changes is the value of each pip or point. Check the exact symbol information on your broker or funded account platform before you calculate the final lot size.

For consistency, each example below uses a $100,000 account, a 1% risk amount ($1,000), and a 25-pip or 25-point stop.

Example 1: EURUSD With a 25-Pip Stop

For EURUSD in a USD account, one pip is normally worth $10 at 1.00 standard lot. Start by finding the risk at 1.00 lot:

25-pip stop × $10 per pip = $250

Then divide the $1,000 risk amount by $250:

$1,000 ÷ $250 = 4.00 lots

At 4.00 lots, each pip is worth $40. If the 25-pip stop is reached, the planned loss is $1,000, before trading costs or slippage.

Example 2: Gold With a 25-Pip Stop

Gold can be traded in lots through a CFD account, but its pip value is not automatically the same as EURUSD’s.

For this example, assume the following: 1.00 lot of XAUUSD represents 100 ounces of gold. One gold pip is a 0.10 price move. One pip is therefore worth $10 at 1.00 lot.

Under this setup, a 25-pip stop means gold can move $2.50 between the entry and the stop:

25 gold pips × $10 per pip = $250

Now divide the $1,000 risk amount by $250:

$1,000 ÷ $250 = 4.00 lots

At 4.00 lots, reaching the 25-pip stop means a planned loss of $1,000, before trading costs or slippage.

The important part is not to memorise that gold always works this way. Providers can use different contract sizes, decimal places, and definitions of a “pip.” Check the specification for the exact XAUUSD symbol on your own platform before you run this calculation.

Example 3: NAS100 With a 25-Point Stop

NAS100 can also be traded in lots on a CFD account. Index movement is usually clearer measured in points, rather than pips.

For this example, assume one NAS100 point is worth $1 at 1.00 lot. Start with the risk at 1.00 lot:

25-point stop × $1 per point = $25

Then divide the $1,000 risk amount by $25:

$1,000 ÷ $25 = 40.00 lots

That number may look far bigger than the forex and gold examples. It does not automatically mean the trade carries more risk. Each NAS100 lot is worth less per point, under the setup used here.

If another provider sets one point at $5 per lot instead, the calculation changes:

$1,000 ÷ (25 points × $5) = 8.00 lots

The planned risk stays at $1,000. The lot size changes because the value of each point is different.

Check the Symbol Before You Calculate

EURUSD, XAUUSD, and NAS100 can all appear in the same trading account, and all accept orders in lots. That does not mean their lots hold the same value.

Before you calculate a position, open the symbol specification on your platform and check:

• Contract size
• Tick size
• Tick value
• Minimum lot size
• Lot-size increments

On MT5, find these details by right-clicking the instrument in Market Watch and selecting Specification. NAS100 may also appear under a different name, such as US100 or USTEC.

How to Size a Trade Around Funded Account Rules

On a personal account, position size is usually based on how much you are willing to risk. On a funded account, that amount also needs to fit inside the loss limits set on the account. At FXIFY, these limits vary by program. There are three main rules to know.

Daily Loss Limit: How Much You Can Lose Today

The daily loss limit controls how far your account can fall in one trading day. It resets each day, calculated from the previous day’s closing balance.

For example, take a Three Phase account with a 5% daily loss limit. If the previous day ended at $100,000, the breach level for the new day is $95,000.

Open losses count too. If your live equity touches the breach level, the account can breach, even if the trade later recovers. Your position size should leave room for every open trade, plus spread, commission, and possible slippage.

Pro Tip: Watch for overnight resets. Say you hold a trade open across the daily reset, usually 5 PM EST or server midnight. Your new limit is then set from your balance and equity at that exact moment. A sudden drop in floating profit right after the reset can trigger a Daily Loss Limit breach before you even open a new trade.

Static Maximum Drawdown: A Fixed Overall Limit

Maximum drawdown controls how much the account can lose overall. With static drawdown, the breach level is fixed to the original account balance. It does not move when the account gains profit.

For example, take a Two Phase Classic account with a 10% static maximum drawdown on a $100,000 balance. The fixed breach level is $90,000. If the account later grows to $105,000, that level still stays at $90,000. Profitable trading can gradually widen the gap between your account equity and this limit.

Trailing Maximum Drawdown: A Limit That Moves With You

A trailing drawdown works differently. Its breach level rises whenever the account reaches a new high in closed balance.

For example, take a One Phase account with a 6% trailing drawdown on a $100,000 balance. It starts with a breach level of $94,000. If the highest closed balance reaches $103,000, the breach level rises to $97,000:

$103,000 − $6,000 = $97,000

The limit moves up on a new high, but it does not move back down after a loss. On applicable FXIFY programs, it locks permanently at the starting balance once profit reaches the account’s drawdown percentage, or the moment a payout is processed.

Which Limit Should You Use?

All of them. A trade must stay within both the daily loss limit and the account’s static or trailing maximum drawdown.

The percentage shown in the program rules is not always the amount you still have free. Before you size a position, check your current breach levels on the FXIFY dashboard.

The two limits work differently, so check them differently. The Daily Loss Limit is checked against your real-time equity. An open trade moving against you can push your equity to the breach level and trigger it, even before that trade closes. Static and trailing Max Drawdown react to your highest closed balance instead. An open position moving against you does not trigger a Max Drawdown breach on its own. The line only updates once a trade closes and the server resets. When you size a position, account for how an open trade could move against you before it closes. That is what puts pressure on the Daily Loss Limit specifically.

FXIFY percentages and calculation rules differ between programs, so check the terms of your specific account each time.

Four Position-Sizing Mistakes to Avoid

Even with the right formula, a few common mistakes can leave you risking more, or less, than you meant to.

1. Choosing Your Lot Size Before Setting the Stop

Base your stop loss on where the trade idea stops being valid. Set that level first. Measure the distance from your entry. Then calculate the lot size.

If you pick the lot size first, and move your stop to match it, you are changing the trade to fit the position. That reverses the correct order: size the position to fit the trade.

2. Ignoring Your Remaining Drawdown

The account’s starting balance does not show how much you can currently afford to lose.

For example, you may be trading a $100,000 account but have only $2,000 left before you hit a daily or maximum drawdown limit. Your new position must fit inside that buffer, along with any open losses and trading costs.

3. Using an Outdated Account Balance

Your balance or equity can change after every trade, withdrawal, or payout. If your risk is set as a percentage, recalculate the dollar amount from the figure your account rules require. Otherwise, your actual risk may no longer match the percentage you meant to use.

4. Using the Same Pip Value for Every Market

Always check the contract size, tick size, and tick value for the exact symbol on your platform. Using the EURUSD pip value for gold or NAS100 can produce the wrong lot size, even if the rest of your maths is right.

FAQs

How do I calculate position size on a funded account?

Turn your chosen risk percentage into dollars. Measure the entry-to-stop distance. Check the pip or point value per lot. Divide the dollar risk by the stop distance multiplied by that value. Then compare this trade, plus other open risk and counted losses, against your account’s daily and total drawdown buffers.

What is the pip value for EURUSD on a standard lot?

One standard lot of EURUSD is 100,000 euros. In a USD account, a one-pip move, normally 0.0001, is worth $10 per standard lot. That makes 0.50 lot worth $5 per pip, and 0.10 lot worth $1. Other currency pairs may need converting into your account’s currency.

Why does my gold position size look different from my forex position size?

Gold can be traded from the same forex-style account, and sized in lots, but it does not automatically follow a currency pair’s pip convention. In this article’s example, one gold pip is 0.10, so a 25-pip stop equals a $2.50 price move. Check the contract size, tick size, and tick value for the exact XAUUSD symbol before you calculate the final lot size.

How does the Daily Loss Limit affect how I size my trades?

The Daily Loss Limit does not replace the formula. It caps the account-level loss allowed for the day. Add the calculated risk on every open position to losses already counted that trading day. Compare that total with your remaining daily buffer, allowing for commissions, swaps, spreads, and possible slippage.

What happens if I size a trade before setting the stop loss?

You end up changing the stop to fit the size you already picked. Because stop distance is part of the formula, moving it changes the risk. Four EURUSD lots with a 25-pip stop represent $1,000, at $10 per pip per lot. Widen the stop to 40 pips without resizing, and that becomes $1,600.

Should I use account balance or equity for position sizing?

Balance reflects closed trades. Equity also includes open profit and loss. If your chosen percentage is based on current equity, convert that figure into dollars. Separately, check your live distance to the Daily Loss Limit, since that reacts to real-time equity. Your distance to Max Drawdown moves only when a trade closes, not with open profit or loss.

How does position sizing change as my account grows?

The formula stays the same, but equity-based dollar risk changes. A selected 1% equals $1,000 at $100,000, and $1,050 at $105,000. That does not automatically create more drawdown room. The breach line may be static or trailing, so calculate your current buffer separately, each time, before you enter a new position size.

Run These Numbers Before You Enter the Lot Size

Choose the dollar risk. Set the stop from the trade setup. Check the contract value. Calculate the lots. On a funded account, also compare your combined open risk with the Daily Loss Limit and your current Max Drawdown buffer.

The formula controls planned risk. It does not decide the outcome, prevent slippage, or guarantee what happens to your account.