Risk ManagementMarch 8, 20265 min read
Position Sizing: The One Math Problem Every Funded Trader Solves
If you can't write your position size formula in one line, you don't have a position sizing system. Here's the formula.
The formula
Position size = (Account × Risk%) ÷ (Stop distance in pips × Pip value)That's it. Memorize it. Every entry should be calculated from this formula, not eyeballed.
A worked example: Opus 100K forex eval
- Account: $100,000
- Risk per trade: 0.5% = $500
- Stop on EUR/USD: 20 pips
- Pip value at 1 standard lot: $10
Position size = $500 / (20 × $10) = $500 / $200 = 2.5 standard lots
If you typically open 5 lots on EUR/USD, you are taking 2x your intended risk on every trade. Three losers in a row puts you at 3% of the account, which is your daily cap.
Why this matters more than your entry signal
A trader with a 45% win rate and disciplined 0.5% sizing will out-perform a trader with a 60% win rate and inconsistent sizing. The math is unforgiving.