How to size your position
You have decided to risk 1% of your account — we explained why in How much should you risk per trade? — so how many lots do you open? One formula.
The formula
Lots = Risk ($) ÷ (Stop distance ($) × 100)
The 100 is the number of ounces in one full lot of gold. Then always round down, never to the nearest.
Three examples
| Account | 1% risk | Stop distance | Result | You open | Actual risk |
|---|---|---|---|---|---|
| $2,000 | $20 | $8 | 0.025 | 0.02 | $16 (0.8%) |
| $5,000 | $50 | $12 | 0.041 | 0.04 | $48 (0.96%) |
| $10,000 | $100 | $10 | 0.10 | 0.09* | $90 (0.9%) |
* In the third example we opened 0.09 rather than 0.10, for the reason in the next section.
If you will close at three targets
Consultya signals come with three targets, and we close a third of the position at each. So your size must divide by three: 0.03, 0.06 or 0.09. A 0.10 lot cannot be split into thirds with the smallest unit available (0.01).
- If the result is 0.02 or 0.04: close half at the first target and half at the second, or close it all at one target.
- If it is below 0.03: you cannot split into thirds, and that is fine.
The spread is part of the stop
An $8 stop with a $0.30 spread means the spread alone is about 4% of your risk, and the shorter the stop, the bigger that share. Add the spread to the stop distance when you calculate, especially on short stops.
How much margin do you need?
Margin = price × 100 × lots ÷ leverage. Assuming a price of $4,000:
| Trade size | At 1:100 | At 1:20 |
|---|---|---|
| 0.01 | $40 | $200 |
| 0.10 | $400 | $2,000 |
Leverage changed only the margin held. The loss if the stop is hit is the same in both cases: lots × stop distance × 100.
The most common mistake: starting from the size (“I'll open 0.10”) and then placing the stop wherever the account “can afford”. The right order is the reverse: the chart sets the stop, your account sets the risk, and the position size is the result.