How to calculate lot size by risk in MT5 and MT4: formula and examples
Updated 13 October 2026
Sizing the lot from your risk is the core of money management: every trade risks the same share of the account, however far away the stop is. Below are the formula, two worked examples and the mistakes that make the real risk bigger than planned.
Why size the lot from risk
If you always trade the same lot, the risk of each trade depends on the stop: a short stop loses little, a long one loses a lot. Risk-based sizing flips that: you decide how much you accept to lose (say 1% of the account), and the size adapts to the distance to the stop.
It protects you from losing streaks. Ten stops in a row at 1% per trade cut the account by about 9.6%; at 5% per trade, by about 40%.
The formula
Lot = Risk amount ÷ (Stop in points × Point value per 1 lot)
Risk amount = balance × risk percentage. Point value is how much money in your account currency a one-point move makes or loses at 1 lot.
Where to find the point value: in MetaTrader open Market Watch → right-click the symbol → Specification. It lists the tick size and tick value. Point value = tick value × (point size ÷ tick size). For most pairs and gold the tick size equals the point, so the point value simply equals the tick value.
Example 1: EURUSD
USD account, 5-digit quotes
| Balance | $10,000 |
|---|---|
| Risk | 1% → $100 |
| Stop | 25 pips = 250 points |
| Point value per 1 lot | $1 (100,000 contract × 0.00001) |
| Lot | 100 ÷ (250 × 1) = 0.40 |
Example 2: gold, XAUUSD
100-ounce contract, 2-digit quotes
| Balance | $10,000 |
|---|---|
| Risk | 1% → $100 |
| Stop | $5 in price = 500 points |
| Point value per 1 lot | $1 (100 oz × 0.01) |
| Lot | 100 ÷ (500 × 1) = 0.20 |
Contract sizes for gold, indices and oil differ between brokers. Check the Specification of your symbol first — otherwise the lot can be off many times over.
Commission, spread and lot step
If your broker charges a commission per lot, add it to the loss at the stop, or the real risk ends up higher than planned:
Lot = Risk amount ÷ (Stop × Point value + Round-turn commission per lot)
In the EURUSD example with a $7 commission per lot: 100 ÷ (250 + 7) = 0.389. Then round down to the lot step (usually 0.01): 0.38. Rounding up is the most common reason the actual risk goes over the plan.
With the stop measured from the entry price, the spread is already accounted for: a buy opens at the Ask and closes at the Bid. But when the spread is wide relative to the stop (overnight, around news), the trade gets worse — a reason to wait or use a wider stop with a smaller lot.
Common mistakes
- Mixing up pips and points: on 5-digit quotes 1 pip = 10 points.
- Using the point value of one symbol for another.
- Forgetting the commission and rounding the lot up.
- Moving the stop further away without re-sizing — the risk grows with the stop.
- The calculated lot is below the minimum (0.01): trading the minimum lot risks more than planned — skip the trade or tighten the stop.
Stop doing it by hand
For a quick estimate use our lot size calculator. In the terminal, the TradeDeck panel does it for you: drag the stop line on the chart and the lot is re-sized on the fly — with tick value, commission, lot step and broker limits included. Risk can be a percentage of balance, equity or free margin, or a money amount.
Questions
Should risk be based on balance or equity?
Balance is the usual choice: the size does not float with open positions. Equity is more conservative during a drawdown. Pick one and stick to it.
How much should I risk per trade?
The usual range quoted is 0.5–2%. It is not a rule but a commitment to yourself: the higher the risk, the deeper the drawdowns in a losing streak.