EURGBP Lot Size Calculator is a calculator in Forex that gives you a value of a lot you open with a trade defined by you with the acceptable risk and trading account size.
Read more: What is Lot Size
This means you can define how much money you are willing to risk per trade. And to do that you define risk which is the number of pips also known as Stop Loss.
This calculator helps you easily define what volume you need to enter into the window for Volume when you want to open new trade.
Read more: Forex for Beginners
Contents
EURGBP Lot Size Calculator
EURGBP Lot size calculator have several fields that needs to be entered in order to calculate lot size:
- Instrument
- Deposit Currency
- Stop Loss
- in pips or in money
- Account Balance
- Risk per trade
These fields you need to enter to calculate lot size.
When you do that you get the result as:
- Lot size
- the lot size you need to enter into the Volume field inside new order window
- Units (trade size)
- number of units of base currency. For Forex currency pairs you have 100,000 units for 1 lot
- Money at Risk
- How much money you are risking with the lot size calculated
Position Size Calculator
EURGBP position size calculator is also called lot size calculator because position or lot is the same. Lot defines how many units of base currency you will use and position tells you how large the volume you will use.
When you use volume and number of units into the calculation it is the same variable we are talking about.
So when calculating the EURGBP lot size of a trade you are calculating EURGBP position size.
How to Use Lot Size Calculator
In this example you can see that I have defined all variables inside lot size calculator:
- Instrument: EURGBP
- Deposit Currency: USD
- Stop Loss (pips): 200
- Account Balance: 10,000
- EURGBP 1 Pip Size: 0.0001
- Risk: 2%
- Contract size(Units per Lot): 100,000
These are variables that you need to define:
- Instrument: EURGBP
- Deposit Currency: USD
- Stop Loss (pips): 200
- Account Balance: 10,000
- Risk: 2%
The EURGBP 1 pip size and contract size is already defined by the Forex instrument.
Read more: Calculate Pip Value
Calculate Lot Size for EURGBP
The Lot size calculator takes these values and first calculates the Lot size needed to be used in order to get risk to 2%.
Risk = 2% out of $10,000 = $200
Stop Loss = 200 pips
Pip value = $10 per 1 lot
Stop Loss in $ = 200 pips x $10 = $2000 per 1 lot
Now, we have a $2000 stop loss if we use 1 lot. But, in order to get to 200 which is 2% risk as I have defined I need to divide Stop Loss with 10. That means I need to use Lot size 10x less that it is used in calculations and that was 1 lot.
Lot size = 1 lot = $10/pip -> 1 lot / 10 = 0.1 lot
Lot size = 0.1 lot = $1/pip
Stop Loss in $ = 200 pips x $1 = $200 per 0.1 lot
This is how we have lot size calculated in this example.
Calculate Units (trade size)
When you have Lot size = 0.1 this is easily converted to the number of units.
1 Lot = 100,000 units of base currency.
0.1 lot = 10,000
And this is how we got the number of units for the 0.1 lot.
Conclusion
EURGBP lot size calculator or EURGBP position size calculator are the same calculators in Forex trading.
Lot size calculator gives you needed lot size to open an order defined by the risk and stop loss level. As an additional result you get what is the lot size in the number of units and what is money at risk.
This is one of the best tools in trading you will need because proper risk management is very crucial in trading.
Learning Forex basics terms is very important to understand the basics so you do not end up making mistakes at the very first beginning.
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