The formula
Lot size = money at risk ÷ (stop loss in pips × $10)
The $10 is the value of one pip on one standard lot of gold. Money at risk is your balance times your risk percentage. Everything else follows from the stop loss: a wider stop means a smaller position for the same risk.
Same risk, different stops
A $2,000 account risking 1% ($20) per trade. The wider the stop, the smaller the position:
| Stop loss | As a price move | Lot size | Actually risked |
|---|---|---|---|
| 30 pips | $3.00 | 0.06 | $18.00 |
| 50 pips | $5.00 | 0.04 | $20.00 |
| 75 pips | $7.50 | 0.02 | $15.00 |
| 100 pips | $10.00 | 0.02 | $20.00 |
| 150 pips | $15.00 | 0.01 | $15.00 |
Why this matters more on gold
A 50-pip stop on EUR/USD is a large move; on gold it's $5, which can happen in minutes. Gold signals therefore tend to have wider stops in pips, and the lot size has to come down to keep the same risk. Traders who carry their forex lot sizes over to gold are the ones who blow accounts. Read more in risk management for gold.