Risk and position sizing
Translate a risk limit into auditable trade inputs.
Risk sizing starts with a defined loss assumption, then converts that assumption into quantity using price distance, contract units, currency conversion and valid volume steps. Portfolio exposure and margin answer different questions, so they must be measured separately.
What this topic covers
These resources provide educational models rather than personalized financial advice. Real losses can exceed a planned stop because of gaps, slippage, fees, liquidity and broker rules.
Every resource identifies its sources, assumptions and correction route. Read the editorial standards for the review method.
Questions answered here
- How is cash risk converted into lots or contracts?
- What is the difference between exposure, margin and maximum loss?
- How do drawdowns change the gain required for recovery?
- How should multiple positions and follower accounts be aggregated?
Complete topic index
9 reviewed resources
Guides (1)
- Risk of Ruin in Trading: Define the Barrier Before the Formula
Understand trading risk of ruin with fixed-stake and fractional-risk examples. Define the loss barrier, time horizon and model assumptions before calculating.
References (4)
- Balance, Equity and Unrealized P&L: Reconcile an Account Ledger
Follow a loss from an open position into balance, distinguish deposits from profit, and compare account snapshots without double-counting P&L.
- Contract Notional Value: Measure Exposure Separately From Margin
Calculate futures and FX notional exposure, compare gross and signed totals, and understand where price-times-multiplier formulas stop being appropriate.
- Margin Level and Free Margin: Calculate Both From One Account Snapshot
Calculate free margin and margin level, model a change in equity, and distinguish account headroom from a stop-loss budget or guaranteed order approval.
- Volume-Step Rounding Validator: Min, Max and Increment
Validate a quantity against minimum, maximum, step and grid origin, compare down, nearest and up policies, and expose the exact rounding difference.
Calculators and tools (4)
- Forex Position Size Calculator with Costs and Lot Steps
Model forex lots from a hypothetical risk budget, stop distance, pip value and costs. Round down to a chosen volume step and see unused modeled budget.
- Portfolio Exposure Calculator: Gross, Net and Equity Ratios
Compare gross and signed net notional with account equity using long and short totals. Understand currency conversion, offsets and concentration limitations.
- Risk and Reward Ratio Calculator with Costs
Compare modeled target profit with stop loss for long or short linear-price scenarios, including quantity and total costs. Check price ordering and limits.
- Simple Margin Requirement Calculator
Estimate single-rate margin from base units, price, currency conversion and leverage. Understand why broker tiers, offsets and futures margin differ.
Product context
Connect the education to a verified workflow
A correct formula or market definition does not prove that every broker, platform pair, account mode or order action is supported. Check the current product information for the exact setup.
Check TradeCopier risk-control featuresReview the current product controls and their scope before relying on an account-level rule.
