Position size is how much of a pair you buy or sell, expressed in lots. The usual method works backwards from the risk: decide how much money you are prepared to lose on the trade, measure the stop-loss distance in pips, then divide one by the other to find the pip value you can afford and the lot size that produces it. Sizing this way keeps risk steady across trades of different stop distances.
Forex glossary
Position Size
Related term
Stop Loss
A stop loss is an order that closes a position automatically if the price moves against it by a set distance. It converts an open-ended risk into a defined one…
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