Pips, Lots & Position Size

How price movement converts into money.

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1. 00:00Pips, Lots & Position Size. How price movement converts into money.
2. 00:05A pip is the standard unit of price movement — the 4th decimal place for most pairs (0.0001) and the 2nd decimal for JPY pairs (0.01).
3. 00:15A pipette is one tenth of a pip.
4. 00:20Reference table: Lot size, Units, ≈ Value per pip (USD quote).
5. 00:25Position size is not a guess — it is calculated from the money you are willing to lose and the distance to your stop loss:
6. 00:35Position size calculator (js): function lots({ balance, riskPct, stopPips, pipValuePerLot = 10 }) {…
7. 00:40Try it yourself — edit the sample and run it in the browser.

A pip is the standard unit of price movement — the 4th decimal place for most pairs (0.0001) and the 2nd decimal for JPY pairs (0.01). A pipette is one tenth of a pip.

Position size is not a guess — it is calculated from the money you are willing to lose and the distance to your stop loss:

function lots({ balance, riskPct, stopPips, pipValuePerLot = 10 }) {
  const riskMoney = balance * (riskPct / 100);
  return +(riskMoney / (stopPips * pipValuePerLot)).toFixed(2);
}

// $5,000 account, risking 1%, 25 pip stop
console.log(lots({ balance: 5000, riskPct: 1, stopPips: 25 }), "lots");