What position sizing is
Position sizing is deciding how much to trade, the part of a trade you set in advance: the outcome is unknown, but the size sets roughly what a loss at the stop would cost.
From a loss amount and the distance to the stop, the size follows:
lots = (balance × risk %) ÷ (stop in pips × pip value per lot)
With the defaults, Ksh 50,000 at 1% risks Ksh 500. A EUR/USD pip is worth Ksh 1,299.00 a lot, so a 25-pip stop costs Ksh 32,475 a lot, and the answer is 0.0154 lots, about 1,540 units. Most brokers take sizes in steps of 0.01 lots, so round down, never up: here that is 0.01 lots, which loses Ksh 325 at the stop.
A stop is an instruction, not a guarantee: a market that gaps past it costs more.
What different risk levels do to an account
Each losing trade takes its share of what is left, so a run of losses compounds. The table shows ten losing trades in a row at four risk settings. It illustrates the arithmetic and is not a recommended setting.
| Risk per trade | Balance after 10 losses | Account down | Gain needed to recover |
|---|---|---|---|
| 1% | Ksh 45,219 | 10% | 11% |
| 2% | Ksh 40,854 | 18% | 22% |
| 5% | Ksh 29,937 | 40% | 67% |
| 10% | Ksh 17,434 | 65% | 187% |
Losses and gains are not symmetrical: drop 50% and you need 100% to get back.
The calculator flags risk above 2% a trade, and above 5% in red, so the arithmetic stays in view. The flags are reference points, not a recommended setting.
What a pip is worth by lot and account currency
On EUR/USD a pip is 0.0001 and a standard lot 100,000 units, so a pip is 10 US dollars. For an account held in KES, converted at the tool's reference rate of 129.9 KES to the US dollar (23 October 2026), that is Ksh 1,299.00 a lot, or Ksh 20.00 at 0.0154 lots.
On these conventions, 0.01 lots with a 5-pip stop risks Ksh 64.95. Our funded accounts agree with the convention: at HFM on 23 October 2026, 0.01 lots of EUR/USD sold at 1.11949 and closed at 1.11932, 1.7 pips in our favour, paid exactly USD 0.17 into a US dollar account, which is 10 US dollars a pip on a full lot.
Yen pairs use a 0.01 pip and gold a 100-ounce contract, so the calculator handles each instrument separately. The pip calculator shows the value at any size.
The Kenyan shilling floats against the US dollar, so the KES value of a pip on a dollar-quoted pair moves with the exchange rate. Of the brokers in our forex broker ranking, FXPesa offers KES-denominated accounts and Exness lists KES as an account currency; we tested US dollar accounts at all ten.
How stop distance changes the position size
For the same loss amount, the position size moves inversely with the stop distance: tightening a stop from 40 pips to 10 quadruples the position and its sensitivity to ordinary price movement.
Stops under 5 pips get a note, because the spread eats part of the distance before the market has moved at all.
Leverage magnifies losses
Leverage lets Ksh 50,000 control 1,540 units of EUR/USD. In most retail hands it is also why the balance disappears.
It multiplies moves both ways, and most retail accounts lose money trading these products. The margin calculator shows what a position ties up, and what a 1% move does to it.
A fixed loss amount does not remove leverage risk: gaps, slippage and stop-outs can cost more.
In Kenya, the Capital Markets Authority (CMA) licenses online forex brokers. Leverage is capped at 1:400, 400 times your deposit (reg. 19(1) of the 2017 Regulations, checked 23 October 2026). The CMA's Investor Compensation Fund does not cover online forex: section 18 of the Capital Markets Act limits it to the failure of a licensed stockbroker or dealer, and no scheme pays for trading losses. See Kenya regulation, our CMA guide and the broker warning list.
Where to take this next
Sizing is one cost of being wrong; holding costs and who holds your money are the others.
- Pip calculator, for what a pip is worth at any size, in KES or your account currency.
- Profit calculator, for what a move made or lost.
- Margin calculator, for what a position ties up at a given leverage.
- Best forex brokers in Kenya, regulation first, cost second.
- Best trading platforms in Kenya, if the platform matters as much as the broker.
- Kenya regulation, on who is licensed and for what.
- Our methodology, on what we measure and what we source.
This calculator is provided for education. It converts at reference rates as of 23 October 2026 rather than live ones, so every figure is an estimate and not a quote. Position sizing controls how much you lose if you are wrong, and does not make a trade more likely to win. Leverage magnifies losses as well as gains, most retail accounts lose money trading these products, and nothing here is investment advice.
