As a forex trader, one of the things you have to contend with is the different values each currency has in terms of the US Dollar. This can make determining your position size quite troublesome, especially when you want to calculate a trade size in a hurry.

Here’s how I do it using a Free Forex Trading Tool.

Calculating Your Forex Position Size

If your trading account is denominated in either USD or EUR, you’ll find this tool handy. You simply need to follow a few steps to come up with the ideal number of contracts to trade in your account.

This is the information you require:

1. Your Account Balance
2. How much you want to risk per trade
3. Details about the trade you are going to take:
   • Buy/Sell
   • Forex Currency
   • Entry Price
   • Stop Price or Number of Pips to risk

Once you have these details, it’s a simple matter of filling in the blanks.

How I Use This Forex Trading Tool

I have a predetermined risk level for both the account as well as the trade. For example:

• Trading Account Risk: 2%
• Single Trade Risk: 45 pips

I then enter the numbers and trade details into the online calculator. It gives me the exact position size that I can take with these risk parameters. Of course, I would usually round down to the nearest 0.01 lots (for micro-mini lots) to keep within my account risk of 2%.

Based on how you calculate your trading risk, you can use it differently. Play around with the numbers and tool until you understand how to use it. It’s pretty simple and straightforward.

Here’s the link to the tool (on another website):

Free Position Sizing Tool

Have fun playing around with it!