Trading practice
Position sizing practice
Calculate lot quantities with explicit contract units, costs, size steps and minimum-order constraints.
5 exercises in this set. No sign-up required.
Before you begin
Work from the hypothetical budget and contract terms in each question. Chosen risk percentages are arithmetic inputs, not recommendations. A calculated loss allowance assumes the stated fills and costs; ordinary stops, gaps and changing conditions can produce a larger realised loss.
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Exercise 1 · Hypothetical example
Calculate the lot quantity for this model. Enter lots to two decimal places.
Hypothetical USD account equity is 5,000. The exercise allocates 0.8% to a modelled loss. EUR/USD entry-to-stop distance is 25 pips, pip value is USD 10 per pip per 1.00 lot, and one lot represents 100,000 EUR. Ignore additional costs and slippage for this first calculation. Available size step is 0.01 lot and minimum is 0.01 lot.
Worked explanation
Budget = USD 5,000 × 0.008 = USD 40. Modelled stop loss per lot = 25 pips × USD 10 per pip = USD 250. Quantity = 40 ÷ 250 = 0.16 lots, or 16,000 EUR units. Check: 0.16 × 25 × 10 = USD 40. This is the price-distance model before any omitted costs or adverse execution.
Exercise 2 · Hypothetical example
Calculate the largest permitted lot quantity within the stated modelled budget. Enter lots to two decimal places.
Hypothetical budget: USD 50. Stop distance: 18 pips. Pip value: USD 10 per pip per full lot. Additional round-trip commission: USD 7 per lot. Minimum and size step: 0.01 lot. The entry-to-stop price distance already uses the assumed executable prices; do not add the same spread twice. No other costs or slippage are modelled.
Worked explanation
Price loss per lot = 18 × USD 10 = USD 180. Add USD 7 per-lot round-trip commission to obtain USD 187 per lot. Ceiling = 50 ÷ 187 = 0.267379… lots. At 0.26 lots, price loss is USD 46.80 and commission USD 1.82, totalling USD 48.62. At 0.27 lots the total is USD 50.49. Down-rounding enforces this modelled budget; it cannot guarantee the live loss.
Exercise 3 · Hypothetical example
Which maximum lot quantity treats the fixed reserve in the correct units?
Hypothetical total budget is USD 35. Reserve a fixed USD 5 for the whole trade, independent of quantity. The assumed stop distance is 20 pips and pip value is USD 10 per pip per lot. Sizes use a 0.01-lot step and minimum. No additional per-lot fee is included. Keep the full fixed reserve even if the trade is smaller.
Worked explanation
Available price-loss allowance = USD 35 − USD 5 = USD 30. One lot loses 20 × USD 10 = USD 200 at the assumed stop fill. Quantity = 30 ÷ 200 = 0.15 lots. Reconcile: USD 30 price loss + USD 5 fixed reserve = USD 35. A total cash reserve belongs in the numerator; a cost per lot belongs in the denominator. The reserve is a model assumption, not a cap on actual charges.
Exercise 4 · Hypothetical example
What conclusion follows without changing the stated plan or budget?
A hypothetical modelled loss budget is USD 3. Stop distance is 50 pips and pip value is USD 10 per pip per full lot. The product’s minimum quantity and step are 0.01 lot. Ignore additional costs for this calculation. The stop represents the chosen invalidation condition and must not be moved solely to make the size fit.
Worked explanation
Required quantity = USD 3 ÷ (50 × USD 10) = 0.006 lots. At the minimum 0.01 lot, modelled price loss is 50 × 10 × 0.01 = USD 5. There is no valid positive size at or below USD 3 under these product terms. Skipping the trade is a complete result; any different instrument, budget or rule would require a new assessment.
Exercise 5 · Hypothetical example
Calculate the largest permitted gold lot quantity within this modelled budget. Enter lots to two decimal places.
Hypothetical XAU/USD long entry is USD 2,350 per troy ounce and the assumed stop fill is USD 2,342. This example’s contract is 100 troy ounces per 1.00 lot. Budget is USD 80, additional round-trip commission is USD 4 per lot, and minimum/step are 0.01 lot. Prices already reflect the assumed execution; no further spread, financing, conversion or slippage is modelled. Actual contract terms vary.
Worked explanation
Price distance = USD 8 per ounce. Multiply by 100 ounces per lot to obtain USD 800 of price loss per lot; add USD 4 per-lot commission for USD 804 total per lot. Ceiling = 80 ÷ 804 = 0.099502… lots. At 0.09 lots, exposure is 9 ounces, price loss USD 72 and commission USD 0.36, totalling USD 72.36. The next 0.01 step exceeds the budget.
Prepared by InsomniCapital, checked 2 October 2026. Original hypothetical exercises; source explanations and limitations are available in the companion guide. Risk disclosure.