[{"data":1,"prerenderedAt":1010},["ShallowReactive",2],{"\u002Fglossary\u002Fwhat-is-leverage":3,"\u002Fglossary\u002Fwhat-is-leverage-related":264},{"id":4,"title":5,"body":6,"category":248,"date":249,"description":250,"draft":251,"extension":252,"meta":253,"navigation":254,"path":255,"related":256,"seo":260,"stem":261,"term":262,"updated":249,"__hash__":263},"glossary\u002F5.glossary\u002Fwhat-is-leverage.md","What Is Leverage in Forex? Formula and Real Numbers",{"type":7,"value":8,"toc":240},"minimark",[9,13,18,21,32,35,89,92,95,109,113,116,119,137,141,144,152,155,159,162,200,204,232],[10,11,12],"p",{},"Leverage is the ratio between the size of a position and the capital required to hold it. A broker offering 1:100 lets you control $100,000 of currency with $1,000 of your own money set aside as margin. It is a borrowing facility, not a strategy: it changes how much capital a trade ties up, and nothing else about the trade.",[14,15,17],"h2",{"id":16},"how-it-works","How it works",[10,19,20],{},"Margin is the deposit the broker freezes while a position is open. The arithmetic is short.",[22,23,28],"pre",{"className":24,"code":26,"language":27},[25],"language-text","Position value  = Contract size × Lots × Price\nRequired margin = Position value ÷ Leverage\n\nEffective leverage = Total open position value ÷ Account equity\n","text",[29,30,26],"code",{"__ignoreMap":31},"",[10,33,34],{},"One standard lot of EUR\u002FUSD is 100,000 units. At 1.0850 the position is worth $108,500.",[36,37,38,54],"table",{},[39,40,41],"thead",{},[42,43,44,48,51],"tr",{},[45,46,47],"th",{},"Account leverage",[45,49,50],{},"Margin frozen",[45,52,53],{},"Cost of a 50-pip adverse move",[55,56,57,69,79],"tbody",{},[42,58,59,63,66],{},[60,61,62],"td",{},"1:30",[60,64,65],{},"$3,616.67",[60,67,68],{},"$500",[42,70,71,74,77],{},[60,72,73],{},"1:100",[60,75,76],{},"$1,085.00",[60,78,68],{},[42,80,81,84,87],{},[60,82,83],{},"1:500",[60,85,86],{},"$217.00",[60,88,68],{},[10,90,91],{},"The position is identical in all three rows. Leverage moved the margin, never the risk.",[10,93,94],{},"The number that actually describes exposure is effective leverage: the notional value of everything open divided by equity. A trader on a 1:500 account running 0.05 lots on $10,000 sits at 0.54:1 — less exposed than someone who paid cash for the same currency. A trader on a 1:30 account running 2.5 lots on the same $10,000 sits at 27:1, pressed against the ceiling the regulator set. The tier says nothing about either of them; the position size says everything.",[10,96,97,98,103,104,108],{},"Run it on your own instrument with the ",[99,100,102],"a",{"href":101},"\u002Ftools\u002Fleverage-calculator","leverage calculator"," and the ",[99,105,107],{"href":106},"\u002Ftools\u002Fmargin-calculator","margin calculator",".",[14,110,112],{"id":111},"why-it-matters","Why it matters",[10,114,115],{},"High leverage does not lose money. It removes the constraint that used to stop you.",[10,117,118],{},"On a 1:30 account, $10,000 of equity caps you at about 2.7 standard lots of EUR\u002FUSD before margin runs out — the broker enforces a position-size ceiling on your behalf. On 1:500 the same $10,000 supports 46 lots. Nothing improved; a ceiling was removed.",[10,120,121,122,126,127,131,132,136],{},"The chain that empties accounts is always the same. Leverage permits a large position, the large position produces a loss too big to sit through, and the resulting drawdown demands a return arithmetic will not supply — ",[99,123,125],{"href":124},"\u002Fguides\u002Fmaximum-drawdown-explained","a 50% loss needs a 100% gain to get back to flat",". Leverage is where the chain starts, but the link that does the damage is size, which is why ",[99,128,130],{"href":129},"\u002Fglossary\u002Fwhat-is-position-sizing","position sizing"," is the control worth having and the ",[99,133,135],{"href":134},"\u002Fglossary\u002Fwhat-is-a-margin-call","margin call"," is the symptom rather than the cause.",[14,138,140],{"id":139},"what-the-data-shows","What the data shows",[10,142,143],{},"The 10,000+ accounts connected to ShowMyTrades (August 2026) sit across 703 distinct broker servers, on MT4, MT5, cTrader and TradeLocker. Effectively every leverage tier on the market is represented somewhere in that set, from a regulated 1:30 cap to offshore 1:500 and beyond.",[10,145,146,147,151],{},"The outcomes do not sort by tier. Across the public accounts with trading history, the median ",[99,148,150],{"href":149},"\u002Fglossary\u002Fwhat-is-maximum-drawdown","deepest drawdown"," is 9.7% — but 38.5% of them never went more than 5% underwater, while 38.2% gave back more than a fifth of their peak and 17.6% more than half of it.",[10,153,154],{},"Two groups of almost identical size, drawn from the same pool of leverage settings, ending an order of magnitude apart. What separates them is not what the broker permitted. These figures describe accounts published on ShowMyTrades, not traders in general, and within that population the variable that moved was size.",[14,156,158],{"id":157},"where-you-see-it-on-showmytrades","Where you see it on ShowMyTrades",[10,160,161],{},"The leverage the broker granted appears as a badge in the account page header, next to the broker name and the account currency. It is read from the terminal, not typed in by the owner.",[10,163,164,165,169,170,174,175,178,179,185,186,192,193,178,196,199],{},"What the trader did with it shows up elsewhere. ",[166,167,168],"strong",{},"Total Lots"," in the advanced statistics is the ",[99,171,173],{"href":172},"\u002Fguides\u002Ftrading-volume-analysis","cumulative volume actually traded",". ",[166,176,177],{},"Drawdown"," and ",[166,180,181],{},[99,182,184],{"href":183},"\u002Fglossary\u002Fwhat-is-drawdown-on-balance","DD on Balance"," in the account stats panel show what that volume cost at the worst moment — the first on equity including open positions, the second on closed balance only. The ",[166,187,188],{},[99,189,191],{"href":190},"\u002Fglossary\u002Fwhat-is-an-equity-curve","Equity Curve"," in the charts viewer plots ",[166,194,195],{},"Balance",[166,197,198],{},"Equity"," together, and the gap between the two lines is where an oversized open position hides until it is closed.",[14,201,203],{"id":202},"common-misunderstandings","Common misunderstandings",[205,206,207,214,220,226],"ul",{},[208,209,210,213],"li",{},[166,211,212],{},"\"1:500 is riskier than 1:30.\""," The account setting is not risk. Two accounts holding identical positions carry identical risk whatever the broker permits. Higher leverage only widens the range of sizes you are allowed to choose badly from.",[208,215,216,219],{},[166,217,218],{},"\"More leverage means more profit.\""," It means less capital tied up as margin. Profit and loss are set by position size and price movement, both unchanged by the tier.",[208,221,222,225],{},[166,223,224],{},"\"Free margin is spare buying power.\""," Free margin is the distance between you and a stop out. Spending it is how a manageable loss becomes a liquidation.",[208,227,228,231],{},[166,229,230],{},"\"My broker caps me at 1:30, so I am safe.\""," A regulatory cap limits maximum total size, not the risk on any single trade. An account can still be lost on one badly sized position well inside a 1:30 limit.",[10,233,234,235,239],{},"Every number above has a calculator behind it — see ",[99,236,238],{"href":237},"\u002Fguides\u002Fforex-calculators-guide","the guide to forex calculators"," for how they fit together.",{"title":31,"searchDepth":241,"depth":241,"links":242},2,[243,244,245,246,247],{"id":16,"depth":241,"text":17},{"id":111,"depth":241,"text":112},{"id":139,"depth":241,"text":140},{"id":157,"depth":241,"text":158},{"id":202,"depth":241,"text":203},"Risk","2026-08-19T00:00:00.000Z","Leverage is the ratio between position size and the capital backing it. Here is the margin formula, a worked example, and drawdown data from thousands of accounts.",false,"md",{},true,"\u002Fglossary\u002Fwhat-is-leverage",[257,258,259],"what-is-a-margin-call","what-is-position-sizing","what-is-maximum-drawdown",{"title":5,"description":250},"5.glossary\u002Fwhat-is-leverage","Leverage","9fzrPGzcUcu5W9wxB-HAiIpCi3gDQHwpcPzkOAH6NtA",[265,480,802],{"id":266,"title":267,"body":268,"category":248,"date":249,"description":472,"draft":254,"extension":252,"meta":473,"navigation":254,"path":134,"related":474,"seo":476,"stem":477,"term":478,"updated":249,"__hash__":479},"glossary\u002F5.glossary\u002Fwhat-is-a-margin-call.md","What Is a Margin Call? Formula, Stop Out and Real Data",{"type":7,"value":269,"toc":465},[270,278,280,286,289,292,331,334,349,359,361,364,367,375,377,383,386,389,391,394,425,427,458],[10,271,272,273,277],{},"A margin call is the broker's warning that the equity in your account has fallen too close to the margin locked up by your open positions. It is a threshold on a ratio, not a judgement call: when ",[99,274,276],{"href":275},"\u002Fglossary\u002Fwhat-is-margin-level","equity divided by used margin"," drops below a published level, the warning fires. Ignore it and the stop out follows, closing positions for you.",[14,279,17],{"id":16},[22,281,284],{"className":282,"code":283,"language":27},[25],"Equity       = Balance + floating P&L of open positions\nFree margin  = Equity − Used margin\nMargin level = (Equity ÷ Used margin) × 100\n",[29,285,283],{"__ignoreMap":31},[10,287,288],{},"Take a $10,000 balance with two positions using $2,000 of margin and a floating loss of $1,500. Equity is $8,500, so margin level is 425%. Let that loss widen to $8,100 and equity is $1,900: margin level 95%, under a typical 100% call threshold.",[10,290,291],{},"Thresholds vary by broker and are always in the contract. The common pair:",[36,293,294,307],{},[39,295,296],{},[42,297,298,301,304],{},[45,299,300],{},"Level",[45,302,303],{},"Typical threshold",[45,305,306],{},"What happens",[55,308,309,320],{},[42,310,311,314,317],{},[60,312,313],{},"Margin call",[60,315,316],{},"100%",[60,318,319],{},"Warning issued, no new positions accepted",[42,321,322,325,328],{},[60,323,324],{},"Stop out",[60,326,327],{},"50%",[60,329,330],{},"The platform closes positions automatically",[10,332,333],{},"The sequence is fixed:",[335,336,337,340,343,346],"ol",{},[208,338,339],{},"Floating losses erode equity while used margin stays where it is.",[208,341,342],{},"Margin level crosses the call threshold. Warning. New orders refused.",[208,344,345],{},"Losses continue. Margin level reaches the stop-out level.",[208,347,348],{},"The platform liquidates positions until the ratio is back above the threshold. Most brokers close the largest loser first.",[10,350,351,352,354,355,358],{},"Nothing in that list waits for you to be at your desk: a liquidation at 3am on a thin market prints exactly as if you had chosen it. The ",[99,353,107],{"href":106}," shows how much margin a given size and ",[99,356,357],{"href":255},"leverage"," will actually freeze before you open anything.",[14,360,112],{"id":111},[10,362,363],{},"The timing is the problem, and it is structural. A margin call arrives at the maximum of the adverse move — that is what the maximum means. Positions are closed at the worst prices of the episode, and the trade that would have recovered is closed before it does. That is the difference between a drawdown you sit through and one realised on your behalf.",[10,365,366],{},"The order makes it worse: closing the largest loser first means the forced exit is the position furthest from its entry.",[10,368,369,370,374],{},"It can also arrive without the price doing anything unusual. ",[99,371,373],{"href":372},"\u002Fglossary\u002Fwhat-is-a-swap-in-forex","Swap"," charged overnight reduces equity, which reduces margin level, on positions you have not touched. A carry-negative basket held for months can walk itself into a call in slow motion.",[14,376,140],{"id":139},[10,378,379,380,382],{},"Across the public accounts on ShowMyTrades with trading history (August 2026), 17.6% have reached a ",[99,381,150],{"href":149}," of more than 50%. These are accounts published here, not traders in general.",[10,384,385],{},"That figure matters because of where the stop out sits. An account holding positions that use most of its equity as margin is already trading near a 100% margin level; halve the equity and the ratio is at a 50% stop out, whatever the owner intended. A drawdown past 50% does not prove a margin call happened — some of those positions were closed by hand — but it marks the population that got close enough for the broker to have a say.",[10,387,388],{},"Recovery is the other half of the arithmetic. Getting back to flat from −50% requires +100%, against a median time-weighted return of +3.2% across the same accounts.",[14,390,158],{"id":157},[10,392,393],{},"There is no live margin-level gauge on a public account page, but every input that drives one is visible.",[205,395,396,403,409,419],{},[208,397,398,178,400,402],{},[166,399,195],{},[166,401,198],{}," in the account stats panel. The gap between them is the floating P&L that pushes margin level down. A wide negative gap is an account whose margin level is falling right now.",[208,404,405,406,408],{},"The ",[166,407,191],{}," in the charts viewer plots both lines together. A near-vertical drop in equity that the balance line then catches up to is a loss being realised — voluntarily or not.",[208,410,411,413,414,418],{},[166,412,177],{}," versus ",[99,415,416],{"href":183},[166,417,184],{}," in the stats panel. The first includes open positions, the second does not. A large equity drawdown that later appears in the balance figure is the moment the floating loss was closed.",[208,420,405,421,424],{},[166,422,423],{},"trades table",", with its Duration and Profit (Gross) columns. A cluster of positions all closing inside the same minute, all at a loss, is the fingerprint of a stop out.",[14,426,203],{"id":202},[205,428,429,435,441,452],{},[208,430,431,434],{},[166,432,433],{},"\"Margin call and stop out are the same thing.\""," They are two thresholds. The call is a warning; the stop out is execution. Some brokers set them close enough together that the gap is not usable.",[208,436,437,440],{},[166,438,439],{},"\"I will just deposit more when it happens.\""," Notification is not a right, and the interval between call and stop out can be seconds in a fast market. Bank transfers clear on banking time, not market time.",[208,442,443,446,447,451],{},[166,444,445],{},"\"A stop loss protects me from a margin call.\""," Only if it fills. Across a weekend gap the market can reopen far past your ",[99,448,450],{"href":449},"\u002Fglossary\u002Fwhat-is-a-stop-loss","stop loss",", and margin level can be below stop out before the first tick prints.",[208,453,454,457],{},[166,455,456],{},"\"Negative balance protection means I cannot lose more than my deposit.\""," Where it is offered and enforced, it caps the debt, not the loss. You still lose the account.",[10,459,460,461,108],{},"For how equity, balance and drawdown fit together on a live page, read ",[99,462,464],{"href":463},"\u002Fguides\u002Freading-a-trading-account-dashboard","how to read a trading account dashboard",{"title":31,"searchDepth":241,"depth":241,"links":466},[467,468,469,470,471],{"id":16,"depth":241,"text":17},{"id":111,"depth":241,"text":112},{"id":139,"depth":241,"text":140},{"id":157,"depth":241,"text":158},{"id":202,"depth":241,"text":203},"A margin call is the broker's warning that your equity no longer covers your open positions. The margin level formula, the stop-out sequence, and real data.",{},[475,259,258],"what-is-leverage",{"title":267,"description":472},"5.glossary\u002Fwhat-is-a-margin-call","Margin Call","VynxA6FNkPfgy4BtWsmmyu4HuFH7a_Ov3jgPAgDjJ70",{"id":481,"title":482,"body":483,"category":791,"date":249,"description":792,"draft":251,"extension":252,"meta":793,"navigation":254,"path":149,"related":794,"seo":798,"stem":799,"term":800,"updated":249,"__hash__":801},"glossary\u002F5.glossary\u002Fwhat-is-maximum-drawdown.md","What Is Maximum Drawdown? Formula and Recovery Maths",{"type":7,"value":484,"toc":784},[485,493,495,498,504,507,557,563,582,584,587,648,651,658,660,667,674,679,690,719,721,736,751,753,779],[10,486,487,488,492],{},"Maximum drawdown is the largest ",[99,489,491],{"href":490},"\u002Fglossary\u002Fwhat-is-drawdown","peak-to-trough decline"," an account has recorded over its entire history, expressed as a percentage of the peak. It is the worst loss the strategy has actually inflicted, as opposed to the worst loss its owner expects. It never decreases: once printed, a 34% maximum drawdown stays at 34% through every subsequent new high.",[14,494,17],{"id":16},[10,496,497],{},"Walk the equity curve forward one point at a time, keeping the highest value seen so far. At each point, measure the fall below that running high. The maximum drawdown is the deepest fall found anywhere on the walk.",[22,499,502],{"className":500,"code":501,"language":27},[25],"MaxDD % = max over t of [ (Peak(0..t) − Value(t)) \u002F Peak(0..t) ] × 100\n",[29,503,501],{"__ignoreMap":31},[10,505,506],{},"The result depends entirely on which curve you walk, and ShowMyTrades publishes both.",[36,508,509,525],{},[39,510,511],{},[42,512,513,516,519,522],{},[45,514,515],{},"Metric",[45,517,518],{},"Measured on",[45,520,521],{},"Open positions counted?",[45,523,524],{},"What it tells you",[55,526,527,542],{},[42,528,529,533,536,539],{},[60,530,531],{},[166,532,177],{},[60,534,535],{},"Equity (balance + floating P&L)",[60,537,538],{},"Yes",[60,540,541],{},"The real fall in what the account was worth at that moment",[42,543,544,548,551,554],{},[60,545,546],{},[166,547,184],{},[60,549,550],{},"Closed balance only",[60,552,553],{},"No",[60,555,556],{},"The fall in realised results",[10,558,559,562],{},[99,560,561],{"href":183},"Balance drawdown"," is the more flattering figure, and it is flattering by construction: an unrealised loss is invisible to it. That is the mechanism behind grid, martingale and averaging-down systems — they keep the balance curve smooth by never closing losers.",[10,564,565,566,178,569,572,573,577,578,581],{},"So an account showing ",[166,567,568],{},"Drawdown 41%",[166,570,571],{},"DD on Balance 6%"," is not broken. It was 41% underwater while its closed results claimed a rough patch of 6%. The equity figure is the honest one, and the ",[574,575,576],"em",{},"gap between the two"," is a description of the strategy. When the two sit close together, positions are being closed near the point where damage is taken — which is what a ",[99,579,580],{"href":449},"stop-loss"," is for.",[14,583,112],{"id":111},[10,585,586],{},"Recovery is asymmetric, because the gain has to compound off a smaller base than the loss did.",[36,588,589,599],{},[39,590,591],{},[42,592,593,596],{},[45,594,595],{},"Maximum drawdown",[45,597,598],{},"Gain needed to reach the old peak",[55,600,601,609,617,625,632,640],{},[42,602,603,606],{},[60,604,605],{},"10%",[60,607,608],{},"11.1%",[42,610,611,614],{},[60,612,613],{},"20%",[60,615,616],{},"25.0%",[42,618,619,622],{},[60,620,621],{},"30%",[60,623,624],{},"42.9%",[42,626,627,629],{},[60,628,327],{},[60,630,631],{},"100.0%",[42,633,634,637],{},[60,635,636],{},"70%",[60,638,639],{},"233.3%",[42,641,642,645],{},[60,643,644],{},"90%",[60,646,647],{},"900.0%",[10,649,650],{},"Under 20% the asymmetry is a nuisance. Past 50% it becomes the dominant fact of the account: you have to double your money with the same strategy that just halved it.",[10,652,653,654,657],{},"Maximum drawdown is also the number that sets your practical leverage ceiling. If a system has historically drawn down 30%, running it at double ",[99,655,656],{"href":129},"position size"," implies a 60% drawdown you have no evidence you can sit through.",[14,659,140],{"id":139},[10,661,662,663,666],{},"The numbers here come from accounts published on ShowMyTrades, not from traders at large. Across the published accounts that have trading history (August 2026), the median deepest drawdown is ",[166,664,665],{},"9.7%",", and the spread around that median is wide in both directions.",[10,668,669],{},[670,671],"img",{"alt":672,"src":673},"Deepest drawdown across public ShowMyTrades accounts: 38.5% under 5%, 23.3% between 5% and 20%, 20.6% between 20% and 50%, 17.6% over 50%","\u002Fimages\u002Farticles\u002Fdrawdown-distribution.svg",[10,675,676],{},[574,677,678],{},"Median 9.7%, and the tail is longer than most published claims allow for.",[10,680,681,682,685,686,689],{},"At the far end, ",[166,683,684],{},"17.6% have fallen more than 50%"," below their peak and ",[166,687,688],{},"38.2% have been more than 20% underwater",". Roughly one account in six has therefore faced the 50% row of the recovery table above: a 100% gain required just to get back to level.",[10,691,692,693,696,697,700,701,705,706,709,710,714,715,108],{},"The near end deserves the same scepticism: ",[166,694,695],{},"38.5%"," record a maximum drawdown under 5%. Some of those are genuinely conservative. Many are simply young. The median published account holds ",[166,698,699],{},"171 closed trades"," at a ",[99,702,704],{"href":703},"\u002Fglossary\u002Fwhat-is-average-trade-length","median trade length"," of ",[166,707,708],{},"2.4 hours","; on a sample that size, a small maximum drawdown records what has not happened yet rather than what cannot. A maximum drawdown is a claim about the tail of a distribution, and ",[99,711,713],{"href":712},"\u002Fguides\u002Fhow-much-history-a-track-record-needs","tails need history behind them"," — which is why the figure is only worth much on a ",[99,716,718],{"href":717},"\u002Fglossary\u002Fwhat-is-a-verified-track-record","verified track record",[14,720,158],{"id":157},[10,722,405,723,726,727,178,729,731,732,735],{},[166,724,725],{},"Account Stats"," panel on every published account page shows ",[166,728,177],{},[166,730,184],{}," on consecutive rows below ",[166,733,734],{},"Avg Monthly %",", both derived from the broker feed rather than self-reported. Compare them first; the divergence is the fastest read on the page.",[10,737,738,739,741,742,745,746,750],{},"The charts module includes a dedicated ",[166,740,177],{}," view, which plots daily drawdown as bars and so answers the question the headline percentage cannot: how ",[574,743,744],{},"long"," the account stayed below its high-water mark. A 25% drawdown recovered in seven weeks and a 25% drawdown still open fourteen months later print the identical number and are not the same account. The ",[99,747,749],{"href":748},"\u002Ftools\u002Fdrawdown-calculator","drawdown calculator"," runs the recovery table above against your own balance.",[14,752,203],{"id":202},[205,754,755,761,767,773],{},[208,756,757,760],{},[166,758,759],{},"\"My maximum drawdown improved this year.\""," It cannot improve. It is a historical maximum, and a good year cannot un-print it.",[208,762,763,766],{},[166,764,765],{},"\"The two drawdown figures should match.\""," They match only when positions are closed near the loss. A wide gap is the signature of held losers, not a data error.",[208,768,769,772],{},[166,770,771],{},"\"Small max drawdown, low risk.\""," Not on a short history. Ask how many trades and how many months produced it before treating it as a risk measure.",[208,774,775,778],{},[166,776,777],{},"\"Percentage drawdown and money drawdown are interchangeable.\""," A 30% fall on a $2,000 account and on a $200,000 account are the same risk profile and very different experiences — but only the percentage is comparable between accounts.",[10,780,781,782,108],{},"For maximum drawdown in context with every other metric on a live account page, read ",[99,783,464],{"href":463},{"title":31,"searchDepth":241,"depth":241,"links":785},[786,787,788,789,790],{"id":16,"depth":241,"text":17},{"id":111,"depth":241,"text":112},{"id":139,"depth":241,"text":140},{"id":157,"depth":241,"text":158},{"id":202,"depth":241,"text":203},"Metrics","Maximum drawdown is the deepest peak-to-trough fall an account ever recorded. The formula, the recovery table, and the real spread across thousands of accounts.",{},[795,258,796,797],"what-is-drawdown","what-is-a-verified-track-record","what-is-a-profit-factor",{"title":482,"description":792},"5.glossary\u002Fwhat-is-maximum-drawdown","Maximum Drawdown","ApNMddCmg0QCLnuOwuyL_buXf8nvEi3z-WICzHc5jDU",{"id":803,"title":804,"body":805,"category":248,"date":249,"description":1002,"draft":251,"extension":252,"meta":1003,"navigation":254,"path":129,"related":1004,"seo":1006,"stem":1007,"term":1008,"updated":249,"__hash__":1009},"glossary\u002F5.glossary\u002Fwhat-is-position-sizing.md","What Is Position Sizing? Formula and Lot Size Calculation",{"type":7,"value":806,"toc":995},[807,814,816,819,825,828,834,840,843,863,869,874,876,879,885,887,902,905,920,922,929,956,958,989],[10,808,809,810,813],{},"Position sizing is the decision of how large a trade to open, derived from how much of the account you are willing to lose if the trade fails. It converts a risk percentage into a lot size using two inputs: the distance to your stop and the value of one pip at that size. It is the single variable that determines an account's ",[99,811,812],{"href":490},"drawdown"," profile, and it is chosen before the trade rather than discovered after it.",[14,815,17],{"id":16},[10,817,818],{},"Three steps, in order.",[22,820,823],{"className":821,"code":822,"language":27},[25],"1. Risk amount   = Account balance × Risk %\n2. Pip value     = Contract size × Pip in quote currency × FX rate to account currency\n3. Position size = Risk amount \u002F (Stop distance in pips × Pip value per lot)\n",[29,824,822],{"__ignoreMap":31},[10,826,827],{},"A worked example on a $10,000 account risking 1% per trade, with a 50-pip stop on EUR\u002FUSD, where one standard lot moves $10 per pip:",[22,829,832],{"className":830,"code":831,"language":27},[25],"Risk amount   = 10,000 × 0.01      = $100\nPosition size = 100 \u002F (50 × 10)    = 0.20 lots\n",[29,833,831],{"__ignoreMap":31},[10,835,836,837,839],{},"Widen the stop to 100 pips and the same $100 of risk buys 0.10 lots. The risk stays constant; the size adapts. That inversion is the whole idea, and it is why sizing and ",[99,838,580],{"href":449}," placement cannot be decided separately.",[10,841,842],{},"Three methods dominate in practice:",[205,844,845,851,857],{},[208,846,847,850],{},[166,848,849],{},"Fixed lot."," Always 0.10 lots, whatever the stop or the balance. Simple, and the risk per trade drifts constantly as both change.",[208,852,853,856],{},[166,854,855],{},"Percentage risk (fixed fractional)."," The formula above. Risk stays proportional, so losses shrink in currency terms as the account falls — the mechanism that makes recovery arithmetically possible.",[208,858,859,862],{},[166,860,861],{},"Martingale progression."," Size increases after a loss to recover it. Wins are frequent and small, the equity curve looks immaculate, and the distribution of outcomes has a fat left tail that arrives all at once.",[10,864,865],{},[670,866],{"alt":867,"src":868},"Doubling the lot size after every loss against a fixed fraction of equity: same win rate, same market, opposite outcomes","\u002Fimages\u002Farticles\u002Flot-progression.svg",[10,870,871],{},[574,872,873],{},"Which one an account uses is readable from the lot sizes alone.",[14,875,112],{"id":111},[10,877,878],{},"Entries decide whether you win. Sizing decides whether you are still there for the next one. Two traders taking identical signals with identical stops produce identical win rates and completely different accounts, because one risked 0.5% and the other risked 8%.",[10,880,881,882,884],{},"Sizing is also where ",[99,883,357],{"href":255}," does its actual damage. High leverage is not itself risk — it is permission to take risk. The risk arrives when that permission is used to open a size whose stop distance implies a loss the account cannot absorb twice in a row.",[14,886,140],{"id":139},[10,888,889,890,893,894,897,898,901],{},"Sizing leaves its signature in the drawdown tail. Across the accounts published on ShowMyTrades that have trading history (August 2026) — accounts published here, not traders in general — ",[166,891,892],{},"38.2%"," have been ",[99,895,896],{"href":149},"more than 20% underwater"," at some point and ",[166,899,900],{},"17.6%"," have lost more than half their peak value.",[10,903,904],{},"A properly sized fixed-fractional account rarely reaches that last band. Losing 50% at 1% risk per trade requires roughly 69 consecutive losses. Accounts in that tail generally arrived another way: escalating size after losses, or a size chosen without reference to the stop at all.",[10,906,907,908,911,912,915,916,919],{},"Context for who is doing the sizing: the median autotrading share on these accounts is ",[166,909,910],{},"99%",", and ",[166,913,914],{},"53.9%"," run above 90% automated, against ",[166,917,918],{},"42.2%"," under 10%. On more than half of the published set, position size is a line in an EA's settings — configured once and never revisited as the balance moves.",[14,921,158],{"id":157},[10,923,405,924,928],{},[99,925,927],{"href":926},"\u002Ftools\u002Fposition-size-calculator","position size calculator"," runs the formula above with live prices, in your account currency, for percentage or fixed-amount risk and for stops expressed in price or pips.",[10,930,931,932,934,935,938,939,942,943,946,947,951,952,955],{},"On a published account page you can audit sizing rather than assume it. The ",[166,933,423],{}," carries a ",[166,936,937],{},"Volume"," column showing the lot size of every individual trade, so a size that steps up after each loser is visible directly. ",[166,940,941],{},"Custom Analysis"," adds a ",[166,944,945],{},"Lot Size"," min\u002Fmax filter: set a floor above the account's normal size and see whether the surviving trades cluster immediately after losses, which is the martingale signature. ",[166,948,949],{},[99,950,168],{"href":172}," in the ",[166,953,954],{},"Advanced Statistics"," module gives the aggregate; across published accounts it stands at 1,724,575 lots traded.",[14,957,203],{"id":202},[205,959,960,966,977,983],{},[208,961,962,965],{},[166,963,964],{},"\"Risking 2% means using 2% of my account.\""," No. 2% is the loss if the stop is hit. The margin the position occupies is a separate figure entirely, set by leverage.",[208,967,968,971,972,976],{},[166,969,970],{},"\"I risk 1% per trade, so my worst case is 1%.\""," Only with one position open. ",[99,973,975],{"href":974},"\u002Fglossary\u002Fwhat-is-correlation-risk","Five correlated positions"," at 1% each are one 5% trade wearing a disguise, and correlated pairs move together precisely when it hurts.",[208,978,979,982],{},[166,980,981],{},"\"No stop loss, so no risk to calculate.\""," Without a stop, the position size formula has no denominator — the risk is not small, it is undefined, and its true value is the margin call.",[208,984,985,988],{},[166,986,987],{},"\"Compounding means scaling up.\""," Fixed-fractional sizing scales both ways. Increasing lots after wins while holding them constant after losses is not compounding; it is a slow ratchet toward a drawdown you never sized for.",[10,990,991,992,108],{},"For the full set of risk and sizing tools and when each one applies, see ",[99,993,994],{"href":237},"the forex calculators guide",{"title":31,"searchDepth":241,"depth":241,"links":996},[997,998,999,1000,1001],{"id":16,"depth":241,"text":17},{"id":111,"depth":241,"text":112},{"id":139,"depth":241,"text":140},{"id":157,"depth":241,"text":158},{"id":202,"depth":241,"text":203},"Position sizing turns a risk percentage into a lot size using your stop distance and pip value. The formula, the three common methods, and what bad sizing costs.",{},[795,259,1005,475],"what-is-a-stop-loss",{"title":804,"description":1002},"5.glossary\u002Fwhat-is-position-sizing","Position Sizing","qP5mfGAxSuWSiccKuy0i_N8LQtpN2UHwOG-ZOVxOViU",1787415691618]