Fixed fractional vs fixed lot: two ways to size positions compared

There are two common ways to decide how big a position is. Fixed lot: the same size every time, say 0.10 lots. Fixed fractional: the same percentage of the account at risk every time, say 1%, with the lot size worked out from the stop. They look similar on a quiet week. They behave very differently when stops vary and when losses pile up.

The difference in one table

	Fixed lot	Fixed fractional
What stays constant	The size	The risk in % of the account
Risk when the stop is wider	Grows	Stays the same (size shrinks)
Size after losses	Unchanged	Shrinks with the account
Calculation needed	None	Size = risk in money ÷ (stop in pips × pip value)

Example 1: the stop changes

Account $2,000, EURUSD, $10 per pip per standard lot.

Trade	Stop	Fixed lot 0.10: risk	Fixed 1%: size
A	20 pips	$20 (1%)	0.10 lots
B	50 pips	$50 (2.5%)	0.04 lots
C	80 pips	$80 (4%)	0.025 lots (round down to 0.02)

Illustrative calculation, not an expectation of results.

With a fixed lot, the trade with the widest stop quietly takes four times the risk. With fixed fractional, every trade risks about the same. The lot size calculator does this division for you; the pip value calculator gives the pip value for other pairs and account currencies.

Example 2: a losing streak

Ten losses in a row at 2% risk, starting from $2,000:

	Fixed 2% of the starting balance ($40)	Fixed 2% of the current balance
After 10 losses	$1,600 (−20%)	$1,634 (−18.3%)
Risk on trade 11	Still $40 (2.5% of what's left)	$32.68 (2%)

Illustrative calculation, not an expectation of results.

Fixed fractional automatically slows down in a drawdown, because each loss makes the next position smaller. The price is that recovery is slower too. That trade-off is the point: it keeps a bad streak survivable.

Which one to choose

• Learning and small accounts: fixed fractional, at 0.5% to 1%. It ties every trade to the stop and to the account.
• Fixed lot can work only if your stops are always about the same distance and the size is tiny relative to the account.
• Whatever you choose, cap the day with a daily loss limit, and remember that the stop itself can slip (see slippage and gaps).

In short

Fixed lot keeps the size constant and lets risk float; fixed fractional keeps risk constant and lets the size adapt. For most traders, keeping the risk constant is what keeps the account alive.