Full Guide · Calculator

Know your risk before you trade

The Calculator is three connected tools in one — a Kelly Criterion sizer, a price/pip distance calculator, and a risk-to-position-size converter. Here's how the three boxes work together.

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The screen, labelled

A schematic of the Calculator layout — each pin is explained in the steps below.

KELLY CRITERION ACCOUNT BALANCE £10,000 WIN RATE 55% AVG WIN 150 AVG LOSS 100 QUARTER KELLY 2.5% · £250 HALF KELLY — RECOMMENDED 5.0% · £500 FULL KELLY 10.0% · £1,000 CALCULATOR — PRICE / PIP DISTANCE CURRENCY PAIR EUR/USD CURRENT PRICE 1.0850 TARGET PRICE 1.0950 LOT SIZE 1.00 DISTANCE TO TARGET +0.0100 (+100.0 pips, +0.92%) VALUE OF MOVE $1,000.00 RISK → POSITION SIZE SUGGESTED POSITION SIZE 0.25 lots IN UNITS 25,000 units RISK AMOUNT £500 (from Half Kelly) CURRENCY £ GBP STOP LOSS (PIPS) 20 1 2 3 4 5

Step by step

Follow the pins in order — from a blank calculator to a sized position, ready to trade.

1
Start with the Kelly Criterion inputs
Enter your account balance and, from your own trade history, your win rate and average win/average loss per trade. These can be in £, $, pips, or R-multiples — only the ratio between win and loss matters.
2
Read the three Kelly tiers
Quarter, Half, and Full Kelly each show a % of your account balance to risk on this trade, and that percentage converted into your account currency. Half Kelly is highlighted as the recommended starting point — full Kelly can suggest aggressive sizing that most traders find too volatile to hold.
3
Set up the Calculator box
Pick your currency pair, then enter the current price and your target price. This box also feeds the pip value used automatically in the box below — you don't need to look it up separately.
4
Check the distance and value of the move
The results show the distance to your target in price terms, pips, and percentage — then, using the lot size you enter, exactly what that move is worth in the pair's quote currency.
5
Convert risk into an exact position size
The Risk Amount field auto-fills from your Half Kelly figure above — override it if you want to test a different scenario. Add your account currency and stop-loss distance in pips, and the box returns the exact lot size and unit count to trade.

The one thing to understand

This is the whole trick behind the numbers on this page.

Kelly Criterion
A formula estimating the mathematically optimal fraction of your account to risk per trade, given your win rate and win/loss ratio. It's a ceiling on rational sizing, not a target — most traders use a fraction of it to reduce variance.
Half Kelly
Betting half the fraction the full formula suggests. It gives up some theoretical long-run growth in exchange for a much smoother ride — why it's the recommended default on this page.
Pip
The standard smallest price move for a currency pair (usually the 4th decimal place, or 2nd for pairs involving the yen). The Calculator box converts your price distance into pips automatically.
Risk → Position Size
Working backward from "how much am I willing to lose" and "how far away is my stop" to "how big should this trade be" — the exact opposite of picking a lot size first and hoping the risk works out.

Common mistakes to avoid

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Using Full Kelly as your actual position size. The full formula assumes your win rate and win/loss ratio are exactly right, every time — in practice they're estimates, and full Kelly sizing amplifies any error in those estimates.
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Feeding in a win rate or win/loss ratio from too few trades. A handful of trades isn't a reliable sample — the Kelly output is only as good as the history behind it.
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Forgetting to update the pair in the Calculator box. The Risk → Position Size box pulls its pip value from whatever pair is currently selected above it — leaving the wrong pair selected will size the position off the wrong pip value.
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Treating the suggested size as a guarantee. This is a sizing tool, not a prediction — it tells you how big to make the bet, not whether the trade will win.
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