Position size
Position size is the traded volume that turns the risk you decided to take into a concrete number of lots or contracts. It is where the plan becomes an order. Open the free lot size calculator
The formula
Lot = cash risk ÷ (stop distance in points × point value per lot). On a 10k account, 1% risk (100), a 50-point stop and a point value of 1 per standard lot: 100 ÷ (50 × 1) = 2 lots. Change any of the three numbers and the lot changes, which is why a fixed lot is the opposite of risk management.
Point value varies by instrument and by account currency. On a cross pair the pip value depends on the current quote; on an index future, on the contract multiplier. Using one instrument's value for another is the quietest common error in a homemade spreadsheet.
After the calculation
Always round down: 2.7 lots become 2, never 3. Check the instrument's minimum lot and step, add commission and swap to the risk, and verify the resulting position fits the firm's exposure cap.
TCC's public calculator runs that whole path with no login and also shows how much of your margin and daily limit the position consumes.