When you're trading, it's important to always manage your risk. One of the best ways to do this is by calculated your lot sizes. In this blog post, we'll show you how to calculate lot sizes for trading so that you can always stay within your risk limits.

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What is a Lot? 

In trading, a lot refers to the size of your position. A standard lot is 100,000 units of the base currency in a forex trade. However, there are also mini lots and micro lots. A mini lot is 10,000 units of the base currency, and a micro lot is 1,000 units.

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How to Calculate Lot Sizes 

There are two main ways to calculate your lot sizes: fixed-risk and fixed-dollar. With fixed-risk, you determine how much you're willing to lose on each trade, and then calculate your lot size based on that. For example, if you're willing to lose $100 on each trade and your stop loss is 20 pips away, then your lot size would be 5 mini lots or 0.5 standard lots. 

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With fixed-dollar risk, you simply risk a set dollar amount on each trade regardless of stop loss distance. So using the same example above, if you're willing to lose $100 on each trade and your stop loss is 20 pips away, then your lot size would be 2 micro lots or 0.02 standard lots. 

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Calculating your lot sizes is an important part of risk management in trading. By doing so, you can ensure that you're never risking more than you're comfortable with on any given trade. There are two main ways to calculate lot sizes: fixed-risk and fixed-dollar risk. With fixed-risk, you determine how much you're willing to lose on each trade before calculating your position size. With fixed-dollar risk, you simply risk a set dollar amount on each trade regardless of stop loss distance. Whichever method you choose, just make sure that you stick with it so that you can always properly manage your risk.

We also developed a free risk calculation tool for TradingView that helps you with this. Click here to download it for free. There is a video tutorial included. Hope you find the lot size calculator tool for TradingView helpful. Cheers.

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