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Risk & Money Management

What Is Fixed Fractional Position Sizing

Fixed fractional position sizing is risking the same fraction of the account on every trade, so the money a trade may lose is worked out fresh from the balance each time and the size follows it up and down. This paper shows you the rule at one per cent on five balances, on gold at its 17 December 2025 close with 20 dollars to the stop, from 0.05 lot at 10,000 dollars to 0.04 after a loss and 0.06 at 12,000; the idea as the same slice of a pie of any size; the balance on a thermometer with the size beside each mark; the coin slot that takes whole steps of 0.01 lot only; and the footer of your Trade tab, where the balance and the equity both sit.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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The same fraction, five balances

Fixed fractional position sizing is a rule that risks the same fraction of the account on every trade, worked out fresh from the balance each time. Take one per cent on gold at 4338.28, its close on 17 December 2025, with 20 dollars to the stop as an example. One per cent of 10,000 dollars is 100, and the size is 0.05 lot. After one loss the balance is 9,900, one per cent is 99, the arithmetic gives 0.0495, and the platform's smallest step rounds it down to 0.04 lot. At 12,000 it is 120 dollars and 0.06 lot. The fraction never changes. The money and the size follow the balance wherever it goes.

The same slice of a pie of any size

Picture two pies with the same slice cut from each. The slice is an angle, and the angle is the rule: one per cent of the pie, whatever the pie's size. On a 10,000-dollar account the gold slice is 100 dollars; on the same account down to 4,000 it is 40. Nobody redraws the angle when the pie shrinks or grows. Fixed fractional sizing is that angle. The money one trade may lose is not a number written down once and kept; it is a share, cut from the account as it is on the day, and the size is worked out from that share every time a trade is placed.

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