Position Sizing: Turning a Risk Percentage Into a Lot Size
Your lot size comes from three inputs: account balance, risk percentage, and stop distance in pips.
- Money at risk you set
- —
- Actual loss at stop
- —
- Pip value at this size
- —
Ignores spread, commission and slippage. A stop can fill worse than its price in fast markets.
Worked example
USD/KES 129.62 · pulled 2026-09-28| Step | What | Calculation | Amount |
|---|---|---|---|
| 1 | Money at risk | 260 000.00 × 1% | KSh 2 600.00 |
| 2 | Pip value, 1 standard lot | USD 10.00 × 129.62 | KSh 1 296.20 |
| 3 | Risk per pip | 2 600.00 ÷ 25 pips | KSh 104.00 |
| 4 | Exact position size | 104.00 ÷ 1 296.20 | 0.0802 lots |
| 5 | Rounded down to 0.01 lot | floor(0.0802, 0.01) | 0.08 lots |
| 6 | Actual loss if the stop is hit | 0.08 × 1 296.20 × 25 | KSh 2 592.40 |
Risk First, Lot Size Second
Decide what fraction of the account you are willing to lose on the trade before you look at lot sizes. That fraction is your risk percentage, and it is the only figure you actually control. Everything else on this page is arithmetic that follows from it.
Most Kenyan traders funding from a phone keep the number small because the account is small. A risk percentage of one or two per cent is a common convention, but the right figure is the one that lets you take the next ten losses without changing how you trade. That is a personal decision, not a rule anyone can hand you.
Once the percentage is fixed, the stop distance in pips is the second input. A wide stop forces a smaller lot. A tight stop allows a larger one. The money at risk stays the same either way, which is the whole point of sizing by risk rather than by lot.
| Figure | Source | Checked |
|---|---|---|
| Licensee names and status | CMA licensees register — cma.or.ke | 2026-09-29 |
| Session windows | Fixed UTC windows; London and New York shift in their DST | On change |
| USD/KES | open.er-api.com | 2026-09-28 |
| Funding limits and fees | Set by the provider and the broker — not published here | Changes without notice |
A figure with no source and no date is a guess with good manners. Anything we could not trace is left out rather than printed from memory.
Why the Pip Value Changes With the Pair
A pip is not worth the same amount on every instrument. On a pair quoted in US dollars, the pip value in dollars is stable. On a pair where the quote currency is something else, the pip value is denominated in that currency and has to be converted before it means anything to a KES account.
This is where most manual calculations go wrong. People compute the lot size on EUR/USD and then apply the same number to USD/JPY or gold. The stop distance in pips is different, and the pip value is different. The calculator on this page handles both, which is why the worked example beside it uses real figures rather than round ones.
Gold and index CFDs make this worse. XAU/USD and NAS100 do not have a standard pip the way a currency pair does, so the contract size and tick value come from the broker's specification sheet. Check that sheet before trusting any number, including the one in the table.
| Figure | Value | Source |
|---|---|---|
| Indicative USD/KES | 129.62 | open.er-api.com, pulled 2026-09-28 |
| How often it moves | Every trading day | — |
| The rate your account uses | Your broker's own conversion | The broker's rate card |
| Symbol on this site | KSh | — |
An indicative rate is for sizing a position in your head, not for settling one. The gap between it and your broker's conversion is part of what a trade costs you.
What You Need Before You Open the Calculator
You need your account balance in the currency the broker holds it, your chosen risk percentage, the entry price, the stop price, and the instrument. If any of those is missing, the output is meaningless. Write them down before you start, not after.
Your broker's contract specifications give the contract size and the tick or pip value for each instrument. That page is usually linked from the trading platform or the funding page. If you cannot find it, ask support for the specification sheet in writing rather than guessing from a forum post.
For deposit and withdrawal mechanics, the M-Pesa app shows your own transaction history and limits. For anything about whether a firm may legally hold your money in Kenya, the CMA licensees register at cma.or.ke is the public list to check. Neither of those affects the lot size arithmetic, but both affect whether the account should exist at all.
| Rail | What it is | Who sets the limit and the fee |
|---|---|---|
| M-Pesa · used most | Mobile wallet | The wallet provider and the broker |
| Airtel Money | Mobile wallet | The wallet provider and the broker |
| Bank transfer | Bank transfer | Your bank and the broker |
| Card | Card payment | Your card issuer and the broker |
Limits and fees are set by the provider and the broker and change without notice, so they are not printed here. Confirm both in the provider's app and on the broker's funding page, and withdraw to the same account you paid from.
Timing the Trade Around Kenyan Hours
Position size does not change with the session, but the stop distance often does. Volatility is thinner during the Sydney and Tokyo sessions, which run from 00:00 to 09:00 and 03:00 to 12:00 EAT respectively. Spreads and whipsaws behave differently then.
London runs from 10:00 to 19:00 EAT and New York from 15:00 to 00:00 EAT. The overlap from 15:00 to 19:00 EAT is when the most volume moves through the major pairs, which usually means tighter spreads and cleaner fills. A stop placed for a quiet session may be too tight for that window.
The practical habit is to set the stop where the trade idea is wrong, then let the calculator tell you the lot size. If the resulting size feels too small to bother with, the trade is too big for the account, not the calculator's fault.
A trading day on an EAT clock
- Busiest window
- 15:00-19:00 EAT — London and New York open together
- Thinnest stretch
- 00:00-09:00 EAT — Sydney alone, wider spreads
- European open
- 10:00-19:00 EAT
- US open
- 15:00-00:00 EAT
- Closed
- Friday New York close until the Sydney open on Monday
Hours are shown for the clocks in force today: London is on BST until 25 October, New York is on EDT until 1 November. Kenya does not change clocks, so each move shifts these local times by an hour and the page is rebuilt on the day it happens.
Set the Stop Distance Before You Touch the Lot Field
Most sizing mistakes happen before the calculator is opened. The risk percentage is chosen, then a lot size is picked to match it, and the stop is placed wherever the chart looks tidy. That order is backwards and quietly breaks the whole exercise.
The stop distance is the input that decides everything else. On a phone screen, with a fixed account balance, a wide stop forces a small lot and a tight stop allows a larger one. The risk percentage never changes. Only the lot moves.
So the sequence is: identify the level that invalidates the idea, measure the distance from entry to that level, then let the calculator return the lot. If the resulting lot looks too small to be worth opening, the trade is too wide for the account, not the calculator being unhelpful.
| Document | What it proves |
|---|---|
| National ID or passport | Who you are |
| Selfie with the ID document | That the document is in your hands |
Brokers usually also ask for proof of address - utility bill or bank statement; requirements differ per firm. The account-opening page of the broker lists what that firm accepts.
A Stop Placed at the Wrong Side of the Spread
A stop is triggered on one side of the quoted price, not the middle. When the stop sits very close to entry, the buy and sell prices sit either side of it, and the position can be closed before the market has really moved against the idea. This is a sizing failure, not a market failure.
The practical consequence is that tight stops need wider buffers than the chart suggests. A stop that looks correct on a candle chart may be sitting inside the normal gap between buy and sell prices. The calculator will happily size it, because it only knows the distance given to it.
Before trusting a small stop distance, check the live buy and sell prices on the platform and see where the stop falls relative to both. If it sits between them, widen it and recalculate. The lot will shrink, which is the honest answer.
| Platform | What it is | Who makes it |
|---|---|---|
| MetaTrader 4 | The older standard; expert advisors and a large script ecosystem | MetaQuotes |
| MetaTrader 5 | The newer build; more order types and timeframes | MetaQuotes |
| cTrader | Depth of market and a different order model | Spotware |
| The broker's own app | Usually simpler, and tied to that one firm | The broker |
A platform is software, not a safeguard: the same terminal is offered by licensed and unlicensed firms alike. The licence question is answered on the register, not in the app store.
Deposits Arrive in Shillings, Charts Do Not
Funding from a phone usually means M-Pesa, Airtel Money, a bank transfer or a card, and the account is credited in whatever currency the broker holds. The chart, however, quotes the pair, not the shilling. Two conversions sit between the wallet and the position, and both affect the size that is actually safe.
The first conversion happens at funding. The second happens inside the account if the balance currency differs from the currency the risk is measured in. A risk percentage applied to a converted balance is not the same number of shillings as it was before the deposit landed.
This is why the risk figure should be set from the account balance shown on the platform, not from the amount sent. Check the broker's own funding page for how deposits are credited, and the M-Pesa app for what actually left the wallet. The difference is real and it changes the lot.
| What you see | What to check |
|---|---|
| A fixed monthly return, promised in advance | Ask which licence permits it, then look the firm up on the CMA licensees register. |
| A deposit asked for in gift cards or vouchers | Check the broker's own funding page: firms list bank, card and wallet rails, not vouchers. |
| Someone offering to trade the account for you | Managing money for a client is a separate permission. The register says whether a firm holds it. |
| A withdrawal released only after a new payment | Read the withdrawal terms you agreed to. A fee invented at payout time is not in them. |
None of this is a judgement about any firm. Each line is a check you can run yourself, starting at cma.or.ke.
When the Calculator Says Zero, Believe It
A correctly built calculator will sometimes return a lot size smaller than the platform's minimum, or nothing at all. This is not a bug. It means the stop distance and the risk percentage cannot both be honoured at the smallest tradable size. The trade does not fit the account.
The common failure is rounding up. A trader takes the minimum lot anyway, reasoning that the difference is small. It is not small. The risk on that position is now larger than the percentage chosen, which means one loss does more damage than the plan allowed for.
The correct responses are to widen the account, narrow the stop, or skip the trade. Before assuming a broker's minimum, check its contract specifications page. Before assuming a deposit limit, check the funding page and the M-Pesa app. Neither number should be guessed.
| Field | What it says |
|---|---|
| Regulator | Capital Markets Authority of Kenya (CMA) |
| Register | CMA licensees register |
| Published at | cma.or.ke |
| Covers retail forex | Yes — the register has a category for it |
| Last read by us | 2026-09-29 |
| Entries transcribed here | 16 |
A register says whether a firm holds a licence on the day you look, and nothing about how it treats clients. Search the legal entity from the broker's own footer, not the brand.
Questions
They are the same thing in practice. Position size is the general term for how much of an instrument you are holding, and lot size is how that quantity is expressed on most forex platforms. The calculator converts your risk percentage and stop distance into that lot figure.
The pip value depends on the instrument, the contract size your broker uses, and the currency your account is denominated in. A calculator that assumes a standard lot and a USD account will disagree with a KES account trading gold or an index. Check the broker's contract specification for the exact figure.
No. Gold and index CFDs have different contract sizes and tick values from currency pairs, and from each other. The stop distance in points or pips means something different on each. Run the calculation separately for every instrument, using the specification sheet from your broker.