Position sizing is one of the most underrated aspects of trading. Using the correct lot size on every trade is the difference between surviving a drawdown and blowing an account. Here's how to use our calculator correctly.
The Core Formula
Lot Size = (Account Balance × Risk%) ÷ (Stop Loss in Pips × Pip Value)
Example: EUR/USD Trade
- Account: $50,000
- Risk per trade: 1% = $500
- Stop loss: 25 pips
- Pip value for 1 standard lot EUR/USD: $10
- Calculation: $500 ÷ (25 × $10) = $500 ÷ $250 = 2 lots
Use the Axon Funded Risk Calculator in your dashboard — it handles pip values automatically for all 15 supported instruments. Just input your account size, risk percentage, and stop loss in pips.
Why This Matters for Prop Challenges
With a 5% max daily drawdown limit, if you take 5 trades in a day all risking 1%, one very bad session (all 5 lose) costs you exactly 5% — right at the daily limit. Oversized risk stacks intraday against the daily cap; the separate 12% static maximum drawdown is measured from initial balance across the lifecycle of the account.
Always use the position size calculator before entering a trade, not after. Sizing a trade 'by feel' is how most accounts get closed prematurely.
