1. Define risk in money before choosing lot size
Choose the maximum account loss you accept if the stop is hit. Then measure the stop distance from your actual entry and use the instrument’s point/pip value to calculate size. This reverses the common mistake of choosing a familiar lot size first and discovering the risk later.
2. Treat stop distance as economic risk
A 20-pip stop and an 80-pip stop should not normally use the same position size if account risk is meant to stay constant. The same principle applies to XAUUSD points and index points. Wider invalidation usually means smaller size.
3. Leverage is capacity, not a risk target
High account leverage allows larger exposure; it does not make that exposure appropriate. Margin availability can hide how much equity is actually at risk. Size from the stop and account loss limit, not from maximum broker leverage.
4. Add correlated positions together
EURUSD long, GBPUSD long and USDCHF short can all express a similar weaker-USD theme. If each trade carries full risk, the portfolio may be much more concentrated than the number of tickets suggests. Group exposure by currency and macro driver.
5. Gold, US30 and NAS100 need broker-specific calculations
Contract size, tick value and symbol naming vary between brokers. A 1.00 lot XAUUSD position is not economically equivalent to a 1.00 lot EURUSD position, and index CFDs vary even more. Read the broker specification before copying any suggested size.
6. Plan for a losing sequence, not one trade
Even a profitable strategy can experience consecutive losses. Ask what five or ten full-stop losses would do to the account at your chosen risk. Smaller fixed-fraction sizing reduces the chance that normal variance becomes account-threatening drawdown.
7. News and gaps can exceed the planned stop
Stops are instructions, not guaranteed prices. Fast releases, weekend gaps and thin liquidity can produce slippage. Reduce size or stay out when the gap between planned risk and executable risk is unacceptable.
8. Measure risk-adjusted results
Pip totals and raw win rate ignore the size of losses and capital at risk. A more useful review records average risk per trade, reward/risk, maximum losing sequence, drawdown, exposure overlap and whether execution assumptions are realistic.