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4Intermediate · Level 4/10Risk Management

Forex Risk Management: Position Sizing & Stops

A practical, step-by-step course that teaches pip-value math, position sizing formulas, stop-loss placement and drawdown control. You will finish able to size trades so a stop-out equals a precise % of your account, calculate pip values across pairs and justify stop placement. Demo practice recommended.

~12 hours6 modules24 lessons14h of guided studyquizzes included

What you'll learn

  • Calculate pip value for any FX pair in a USD account and convert for other account currencies
  • Use the position-sizing formula so a stop-out costs exactly 0.5%, 1% or 2% of your account
  • Determine lot size (standard/mini/micro) and required margin given leverage and price
  • Place stop-losses based on structure and volatility (ATR) with quantified risk
  • Set realistic risk-reward ratios and compute trade expectancy in dollars
  • Calculate drawdown and required recovery percentages; model consecutive loss scenarios
  • Create a simple daily risk plan and trade-ticket checklist to execute size and stops correctly
  • Practice all calculations on a demo account and keep a trade journal to measure risk adherence

Course curriculum

6 stages, easiest first. Lesson content unlocks with enrollment.

Stage 1Module 1 — Core definitions & account mechanics4 lessons + quiz

Define the building blocks every trader must know: pip, lot, spread, margin, leverage, balance, equity and free margin. This module gives the arithmetic basis for all risk calculations and ends with a short quiz.

  1. What is a pip, lot and spread?30 min
  2. Margin, leverage and required margin formula35 min
  3. Account types, denomination and currency conversion30 min
  4. Practical checklist: what you must know before placing an order35 min
Stage 2Module 2 — Pip value calculations across pairs4 lessons + quiz

Step-by-step methods to compute pip value for quote-USD pairs, USD-quoted JPY pairs, and cross pairs that don't include USD. Includes worked examples and conversion formulas. Module ends with a quiz.

  1. Pip value formula for quote-currency = account currency (e.g., EUR/USD)35 min
  2. JPY pairs and non-USD quote currencies35 min
  3. Cross pairs without USD (e.g., EUR/GBP): two-step conversion35 min
  4. Worked examples: EUR/USD, GBP/JPY and AUD/CAD35 min
Stage 3Module 3 — Position sizing formulas and worked examples4 lessons + quiz

Derive and apply the position-sizing formula: position_size_lots = risk_amount / (stop_distance_pips × pip_value_per_pip_per_lot). Includes rounding rules, lot increments and practice problems. Module ends with a quiz.

  1. The core position-sizing formula explained35 min
  2. Examples for USD account: EUR/USD and USD/JPY35 min
  3. Sizing for cross-currency accounts and non-USD accounts35 min
  4. Order-ticket practice: inputting size, stop and expected loss35 min
Stage 4Module 4 — Stop-loss placement and risk-reward4 lessons + quiz

How to place stop-losses that respect technical structure and account risk: support/resistance, swing points, ATR-based volatility stops, and hard-percent stops. Learn to compute risk-reward and trade expectancy. Module ends with a quiz.

  1. Stop-loss by price structure: support, resistance and swing highs/lows35 min
  2. Volatility-based stops using ATR35 min
  3. Risk-reward ratios: setting take-profit and computing expectancy35 min
  4. Practical trade templates: examples with 1:2 and 1:3 R:R35 min
Stage 5Module 5 — Drawdown mathematics and why 1–2% keeps accounts alive4 lessons + quiz

Quantify drawdown, recovery percent, and the compounding effect of losses. Demonstrates mathematically why risking 1–2% per trade reduces ruin risk and how many consecutive losses are required to halve an account. Module ends with a quiz.

  1. Drawdown vs. loss: definitions and formulas35 min
  2. Consecutive losses math and ruin thresholds35 min
  3. Recovery examples: 10%, 25% and 50% drawdowns35 min
  4. Portfolio-level risk: position correlation and max drawdown planning35 min
Stage 6Module 6 — Execution, journaling and practical routines4 lessons + quiz

Turn calculations into repeatable routines: pre-trade checklist, trade ticket entry, demo practice with Exness, and a journal template to measure adherence to risk rules. Module ends with a quiz.

  1. Pre-trade risk checklist and trade ticket workflow35 min
  2. Using a demo account to practice calculations (Exness recommended)35 min
  3. Trade journal fields and reviewing risk adherence35 min
  4. Monthly risk report and plan adjustments35 min
Not sure yet?

Sample the teaching first

We wrote a free in-depth guide on this exact topic — read it, and if the teaching style clicks, the course goes ten times deeper.

Read: Forex Risk Management 2026: Practical Rules, Position Sizing & Stops

Frequently asked questions

Is this course really worth paying for?

Every Forex Fluency course is a deep, structured program — long-form fact-checked lessons, fully worked numeric examples, diagrams and end-of-module quizzes. At $75 it costs less than one impulsive, uneducated trade typically loses.

How do I access the course after paying?

Checkout takes a minute. Once your payment is confirmed you receive an access code by email — enter it on the My Learning page and every lesson unlocks instantly, forever.

Do I need a trading account first?

No. You only need a free demo account for the practice exercises, and we show you exactly when and how to open one — no deposit required.

Will this course make me profitable?

No honest school promises that. Most retail traders lose money; education, risk management and disciplined practice are what separate the minority who succeed. This course gives you that foundation — the results depend on you.

Is it self-paced?

Completely. Lessons are written, not scheduled — read them any time, on any device, and your progress is saved as you go.