# Fixed Lot vs Percentage Risk - Which Is Better > Two approaches to position sizing - fixed lot and percentage risk - produce very different results over time. Here is an honest comparison. **Tags:** fixed-lot, percentage-risk, position-sizing, comparison **URL:** https://traderjournal.app/money-management/fixed-lot-vs-percentage-risk-trading --- # Fixed Lot vs Percentage Risk - Which Is Better Position sizing comes down to two fundamentally different approaches: trading the same lot size every trade regardless of anything else (fixed lot), or calculating the lot size each time based on a percentage of your account and your specific stop loss (percentage risk). The difference between these two approaches, compounded over hundreds of trades, is significant. --- ## Fixed Lot Sizing Fixed lot sizing means you trade the same size on every trade. For example: always 0.1 lots. Period. **What it looks like in practice:** On a $10,000 account, 0.1 lots with $10 pip value: - 10-pip stop: $10 at risk (0.10% of account) - 30-pip stop: $30 at risk (0.30% of account) - 80-pip stop: $80 at risk (0.80% of account) The same lot size produces wildly different actual risk depending on where you place your stop. This is the core problem with fixed lot sizing. **When fixed lot might be acceptable:** If your strategy uses a fixed, non-adjusting stop loss distance on every trade - say, always exactly 20 pips - then fixed lot sizing produces consistent actual risk. This is rare but exists in some strict rule-based systems. If you are paper trading or learning the mechanics of trade execution without wanting to think about sizing, a fixed micro lot (0.01) keeps losses small while you build skills. **The problem with fixed lots:** As your account grows, fixed lot sizing does not scale. A 0.1 lot position on a $5,000 account is 2x the percentage risk as on a $10,000 account. Successful fixed lot traders are gradually reducing their proportional risk as accounts grow, and unsuccessful ones are gradually increasing it as accounts shrink - exactly the wrong behavior in both directions. --- ## Percentage Risk Sizing Percentage risk sizing calculates the correct lot size for each trade based on a fixed percentage of the current account balance and the specific stop loss distance. **What it looks like in practice:** On a $10,000 account with 1% risk: - Trade with 10-pip stop: $100 risk / (10 x $10) = 1.00 lots - Trade with 30-pip stop: $100 risk / (30 x $10) = 0.33 lots - Trade with 80-pip stop: $100 risk / (80 x $10) = 0.13 lots Every trade risks exactly $100 (1%), regardless of where the stop is placed. **The compounding effect:** As your account grows from profitable trading, your position sizes grow proportionally. A $10,000 account that grows to $15,000 now has $150 as 1% risk, allowing larger positions without changing the risk rule. Conversely, during a drawdown, position sizes shrink automatically. A $10,000 account that drops to $8,000 now has $80 as 1%, reducing exposure when the account is most vulnerable. This self-adjusting behavior - larger when winning, smaller when losing - is one of the key properties of percentage-based sizing. It is mathematically aligned with survival. --- ## Performance Comparison Over 100 Trades Assume a strategy with 55% win rate and 1.5:1 R:R, starting with $10,000: **Fixed lot (0.1 lots):** Results are linear but not account-adjusted. Profits add consistently but losses do not shrink during drawdowns. **1% percentage risk:** Account grows faster during winning periods (as 1% of a larger account is more dollars). During drawdowns, position sizes shrink automatically, reducing the velocity of loss. Over 100 trades, the percentage risk approach consistently outperforms fixed lot on a risk-adjusted basis. The main advantage is loss deceleration during drawdowns. --- ## The Practical Recommendation Use percentage risk sizing for all real trading. The extra step of calculating lot size per trade adds about 30 seconds to your pre-trade routine. The risk control benefit compounds over thousands of trades. Use fixed micro lots (0.01) only during strategy testing or initial platform learning phases where simplicity matters more than optimal risk management. --- Your Trader Journal captures lot size on every trade. After 90 days, review your lot sizes against your account balance over time to verify your sizing approach is consistent. Download at android.traderjournal.app or ios.traderjournal.app.