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Gold / Interactive guide

Choose the risk. Then the size.

A risk budget becomes a quantity only after you include the stop distance and an allowance for costs.

Canvas of Knowledge · 13 November 2026 · 1 min read

THE GOLD CANVAS / POSITION SIZING06 / 12

Choose the risk. Then the size.

A risk budget becomes a quantity only after you include the stop distance and an allowance for costs.

MODEL QUANTITY FOR A $25 BUDGET4 oz

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Position size is an output of the risk plan, not a substitute for it. Original explanatory diagram. Numeric prices and trading examples are hypothetical.

U.S. SEC · Stop and stop-limit orders · Original calculations

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01

Define a dollar budget

In this worked example, a USD 5,000 account allocates 0.5% to a trade: USD 25. This is an illustration, not a recommended risk percentage.

02

Build the per-ounce loss estimate

Use a USD 5 entry-to-stop distance, USD 1 slippage allowance and USD 0.25 additional round-trip cost per ounce. The modelled loss per ounce is USD 6.25.

03

Divide and round down

USD 25 ÷ USD 6.25 permits four ounces in the model. The calculator rounds down to the quantity increment entered. It does not assume that any broker offers that increment.

04

A budget is not a guarantee

A stop can fill beyond its trigger; an allowance is only an estimate. Losses can exceed the budget. Check contract size, margin availability, minimum order size and execution rules separately.

FOLLOW THE EVIDENCE

Sources & further reading

Sources checked 13 November 2026. These organisations provide reference material and do not endorse this website.

THE GOLD LAB / INTERACTIVE

Position size from risk

Estimate ounce exposure, then round down to an allowed increment.

Account equity · USDRisk budget · %Entry-to-stop distance · USD / ozSlippage allowance · USD / ozExtra round-trip cost · USD / ozQuantity increment · oz

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Allowance is an estimate. Stops can slip further and losses can exceed the budget. Check product minimums and margin separately. Cost is per ounce; no broker lot size is assumed.

See the calculation & input limits

Budget ÷ (stop distance + slippage + extra cost), rounded down to the entered ounce increment.

Account equity · USD: 0.01–100,000,000; Risk budget · %: 0–100; Entry-to-stop distance · USD / oz: 0.01–100,000; Slippage allowance · USD / oz: 0–100,000; Extra round-trip cost · USD / oz: 0–100,000; Quantity increment · oz: 0.0001–10,000.

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