Forex Risk Calculator

One percent per trade is not one percent of the account

The rule everybody repeats — risk one percent per trade — is a rule about a single ticket. It says nothing about the account, because the account does not hold one ticket. Hold four tickets that each risk one percent and the account is not risking one percent; it is risking four, minus whatever the tickets cancel out, plus whatever they quietly double.

The addition is the easy half, and it is the half most traders never actually do. Each ticket's risk is its stop distance times its units, converted into your account currency, and the total is the sum of those. What makes the number bigger than expected is never the arithmetic — it is the second effect sitting behind it.

Three long positions on EUR/USD, GBP/USD and AUD/USD look like three different trades on three different charts. On the exposure line they are one position: long Europe, long Britain, long Australia, and short the dollar three times over. If the dollar strengthens, all three stops go together, and the four percent you thought you were risking arrives in one afternoon rather than in four separate lessons. Correlation does not add risk; it concentrates it, which is worse, because concentrated risk arrives all at once.

This is why the tool above nets the currency legs before it reports anything. Two tickets can sum to a modest total risk and still leave the account holding a single fourteen-times-equity bet on one currency — a number no per-trade rule will ever show you.

The arithmetic, printed out

Four lines, and nothing is hidden between them:

1. Risk is measured to the stop, not to zero. A ticket without a stop has no defined risk, so the page will not price it. If a row has no stop filled in, the honest answer is that the risk is whatever you are willing to lose, and the tool leaves it out rather than inventing a number.
2. The conversion uses the entry price you typed. For a pair that quotes in something other than your account currency, the money at risk is in that other currency first and has to be converted. The rate used is the one on your ticket, not a rate fetched from anywhere, and the page says so.
3. Pip size comes from the pair. JPY pairs quote to two decimals, so one pip is 0.01 of price; the rest quote to four, so it is 0.0001. The stop distance in pips is the price distance divided by that number, which is why a "20 pip stop" is a different amount of price on USD/JPY than on EUR/USD.
4. Costs are not in it. Spread and commission are charged when you close, and they differ by broker, so they are left out of the risk figure rather than estimated. Add them yourself if you want the worst case: they make every number here slightly worse.

Precision is stated rather than hidden: money to two decimals, pips to one, multiples of equity to two. Nothing is rounded before it is used, and no intermediate figure is rounded up.

A 25-pip stop is not the same money twice

Everything above assumes the pair quotes in your account currency. Most forex pairs do not, and the ones that do not turn the words you use — "I risk 25 pips" — into an amount of a currency you may never have held. Below is the EUR-quote group from this site's contract data: the stop is the same 25 pips on every row, the position is the same one mini lot, and the money is different in kind each time.

Twenty-five pips is 2,500 of one currency and 25 of seven others. Neither figure is in dollars, and both need a second rate before they mean anything to your account — which is the point: on a cross, the risk number you carry in your head is in the wrong units, and the conversion is where the sizing error usually hides.

That is also why the tool above restricts its pair list to where the US dollar is one of the two legs. With the dollar on one side, the conversion is the price on your own ticket and there is nothing to guess.

What it does not count

The figure the tool prints is the defined risk of the tickets you entered, and it is smaller than what a bad day can cost. Left out on purpose:

• Gap risk. A stop is an order, not a guarantee. Weekend gaps and news spikes fill where the market is, not where your line was, so the realised loss can exceed the distance you typed.
• Tickets with no stop. Undefined risk is not zero risk, and the page will not pretend otherwise by pricing it.
• Positions on other platforms. An account spread across two brokers has one risk profile and two logins. Add them by hand.
• Correlations beyond currency. Gold and the dollar, indices and the dollar, oil and the Canadian dollar — these move together and the netting above will not catch them.
• Overnight financing and costs. Small per night, not small per month, and entirely broker-specific.

Every one of those makes the true number worse, never better. Treat the output as the floor.

Questions traders ask

Add the tickets, do not average them. Each one risks its stop distance times its units, converted into your account currency, and the total is the sum. With the defaults on this page — half a standard lot on four majors, twenty pips of stop each — that total is 366.67 USD, or 3.67% of a 10,000.00 account, which is over the 3.00% limit most people believe they are keeping.

On the exposure line, no. Long EUR/USD, long GBP/USD and long AUD/USD are three longs against one short: the dollar. Net them and the account is short 150,500.00 USD of it in the default example before the USD/JPY ticket is counted, which is why a single dollar rally can take all three stops in one session.

Because the pair quotes in it. On EUR/JPY the price is yen per euro, so a stop distance times units is a number in yen first — 2,500 JPY for a 25-pip stop on one mini lot — and it only becomes your account currency after a conversion at the rate on your ticket. The page uses your entry price for that conversion and says so.

No. The margin lines here are the notional divided by your leverage — what is pledged right now, and what is still free. Whether that turns into a call depends on your broker's level and on where price goes, which is the forex margin calculator's question, not this one.

Then that ticket has no defined risk, and the tool leaves it out rather than guessing a number for it. A position with no stop is not a smaller risk; it is an unmeasured one, and the total printed here would be the floor of what you are carrying, not the whole of it.

No. Total risk is what one day can cost you if every stop goes; risk of ruin is the probability that a long enough run of days ends the account, and it depends on your win rate and payoff as well as your size. That model lives on the risk of ruin calculator.

Related guides

• Forex position size calculator — turning a risk budget into a lot size before you click.
• Portfolio risk and position limits — where a total-risk cap should sit.
• Forex margin calculator — how far price can travel before the broker calls.
• How much should you risk per trade? — where the per-trade number comes from.
• Risk of ruin calculator — what your size does to the odds of ending the account.
• Reference data — the contract specifications behind the pip sizes above.

Open the position size calculator