Pip value is calculated for your account currency and pair using live exchange rates, the same way professional calculators do. This tool is for education, not financial advice.
What a risk calculator actually does
Most beginners pick a lot size first, then hope the trade works. That is backwards, and it is why accounts blow up. A risk calculator flips it. You decide the one thing you can control, which is how much money you are willing to lose if the trade goes wrong, and it tells you the lot size that fits.
So the lot size is never a guess. It is the answer to a simple question: given my balance and my stop loss, how big can this trade be so that a loss only costs me my small, fixed amount?
Four steps, in plain English
Put in your balance
This is the real money in your trading account. Be honest with it, because every other number depends on it.
Choose how much to risk
Conservative traders risk 1% of the account on a single trade. Standard is 2%. On a $1,000 account, 1% is just $10. That sounds small, and that is exactly the point: it keeps one bad trade, or ten bad trades in a row, from ending your account.
Add your stop loss in pips
Your stop loss is the price level where you admit the trade was wrong and get out. Measure the distance from your entry to that level in pips. A wider stop means a smaller lot size, and a tighter stop means a bigger one.
Read your lot size
The tool gives you the exact position size to place. Trade that size, set that stop, and your loss is capped at the amount you chose. Nothing surprises you.
A worked example
Say you have $1,000 and you risk 1%. That is $10 on the trade. Your stop loss is 20 pips away, and you are trading EUR/USD, where each pip is worth about $10 on a full standard lot.
Divide the $10 you are willing to risk by the cost of the stop, which is 20 pips times $10, or $200 per standard lot. That gives 0.05 standard lots, the same as 5 micro lots. Place 5 micro lots with a 20-pip stop, and a loss costs you exactly $10. Not $11, not $50. Ten.
That is the whole discipline. Small, fixed, survivable losses, over and over, while you learn. The traders who last are almost never the ones with the best entries. They are the ones who never let a single trade hurt them.
Want the full picture on protecting your money?
Read our beginner articles on risk management, stop losses, and position sizing.
Read the risk guides →