The rule in one line
lots = risk amount ÷ (stop pips × $10)
Worked example: a $5,000 account risking 1% is $50. A buy at 4180.00 with the stop at 4172.50 is a $7.50 move, so 75 pips. 75 pips × $10 = $750 per lot. $50 ÷ $750 = 0.0667, rounded down to 0.06 lots, which risks $45.00 if the stop is hit.
What losing streaks do to an account
Losing streaks are normal. A strategy that wins half its trades will string together five or more losses fairly often over a few hundred trades. The table shows what's left of the account after consecutive losses, with risk recalculated from the shrinking balance each time:
| Risk per trade | 3 losses | 5 losses | 10 losses | 15 losses |
|---|---|---|---|---|
| 0.5% | 98.5% | 97.5% | 95.1% | 92.8% |
| 1% | 97% | 95.1% | 90.4% | 86% |
| 2% | 94.1% | 90.4% | 81.7% | 73.9% |
| 5% | 85.7% | 77.4% | 59.9% | 46.3% |
At 1%, ten losses in a row costs under 10%. At 5%, the same run takes 40%. And a deeper hole needs a much bigger gain to climb out:
| Drawdown | Gain needed to recover |
|---|---|
| −10% | +11.1% |
| −20% | +25% |
| −30% | +42.9% |
| −40% | +66.7% |
| −50% | +100% |
| −75% | +300% |
Choosing your number
- 0.5%: for learning, for new strategies, or for anyone trading around news. Slow but very hard to blow up.
- 1%: the common default. Big enough to matter, small enough that a bad week stays a bad week.
- 2%: the top of the usual range. Works for selective traders with a tested edge; uncomfortable in a streak.
- 5% and up: one bad week can halve the account. If the account is so small that this feels necessary, the honest fix is more capital or smaller positions, not more risk.
Whatever you choose, keep it the same from trade to trade. Doubling up after losses to "get it back" is how most gold accounts that blow up actually blow up.
Gold-specific things that change your real risk
Spread
Gold spreads are often 2–4 pips at mainstream brokers in liquid hours and can widen sharply around the 17:00 New York daily break and major US data. Add the spread to your stop distance when you size.
Slippage and gaps
A stop is an instruction, not a guarantee. On CPI or jobs releases gold can jump straight through a stop, and Monday's open can gap past Friday's close. Size as if the stop is hit cleanly, and keep risk lower into scheduled news (times are on the gold sessions page).
Several trades at once
Two gold buys with 1% risk each are really one 2% bet on the same move. Many traders cap total open risk at 3–5% of the account across everything.
Split take-profits
If you close in parts (say half at TP1, half at TP2), your risk is still set by the full position at the stop until the first part is closed. Size the whole position on the stop, then split it.
Don't move the stop to fit the size
When the calculator says your size is 0.02 and you wanted 0.10, it's tempting to shrink the stop until 0.10 "fits". But the stop's distance came from the chart. Shrinking it doesn't reduce risk, it just makes the trade more likely to be stopped out before the idea plays out. Keep the stop, take the smaller size, or skip the trade. Try it in the calculator with the stop as two prices.