Finish the trade before you open it, your stop and your lot size are one decision
23 August 2026, 11:49
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George Soros is quoted at the front of Swissquote's risk management guide with a line every trader should tape to their screen: it does not matter whether you are right or wrong, what matters is how much you make when you are right and how much you lose when you are wrong. The whole discipline of position sizing lives in that sentence. And the guide turns it into a simple rule of order: finish the trade before you open it. Decide where you will get out, both your stop and your target, at the very moment you decide to get in.
Most beginners do the opposite. They choose a lot size first, usually out of habit or greed, then place a stop wherever it happens to leave them, and only discover afterward how much money is actually at risk. That is backwards, and it is how an account dies unevenly, risking tiny amounts on some trades and frightening amounts on others without ever deciding to.
The correct order is to fix the risk first and let the lot follow. Your stop distance is decided by the chart, by where the trade would be proven wrong. Your risk is decided by you, as a fixed slice of the account. The lot size is then not a choice at all. It is whatever number makes those two agree.
The arithmetic is short. The money you are willing to lose is your capital times your risk percentage. On a ten thousand unit account risking one percent, that is one hundred. The lot size is that risk amount divided by the stop distance in pips times the pip value per lot. With a ten pip stop and a pip worth ten per standard lot, that is one hundred divided by one hundred, which is one lot. Change the stop to twenty pips and, to keep the same one hundred at risk, the lot must fall to half. The risk stays nailed to one percent while the lot breathes with the stop. That is the entire trick, and it never varies.
It is worth being honest that broker guides sometimes reason in absolute amounts rather than a clean percentage, and their worked examples can drift arithmetically. The habit that protects you is not any single example, it is the rule itself: a fixed fraction of the account per trade, a stop set by the chart, and a lot computed from those two. Do that on every trade and your losing streaks become survivable by design rather than by luck.
Once the size is set, the same plan carries the exit. If your stop is ten pips, a two to one target sits at twenty and a three to one target at thirty, chosen before the trade is live so the decision is never made in the heat of a moving price. You are simply executing a plan you finished writing before you risked a cent.
The lot size calculator that turns a stop distance and a risk percentage into an exact position is available for free on my MQL5 profile.
