Position Sizing: Turning a Risk Percentage Into a Lot Size

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.

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.

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.

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 01:00 to 10:00 and 03:00 to 12:00 EAT respectively. Spreads and whipsaws behave differently then.

London runs from 11:00 to 20:00 EAT and New York from 16:00 to 01:00 EAT. The overlap from 16:00 to 20:00 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.