Get position sizing wrong and the 20-pip challenge breaks immediately — too big and one loss is catastrophic, too small and a win doesn't advance the ladder. Here's how the sizing actually works.
The goal of sizing
In the challenge, lot size isn't a feeling — it's derived. You size each trade so that a 20-pip win produces exactly the gain needed to reach the next level. Everything keys off three numbers: your target profit, the 20-pip distance, and the pip value per lot.
Pip value, briefly
For a standard lot (100,000 units) of most USD-quoted pairs, one pip is about $10. So:
- 1.00 lot → ~$10 per pip
- 0.10 lot → ~$1 per pip
- 0.01 lot (micro) → ~$0.10 per pip
(JPY pairs and cross rates differ slightly; your platform shows the exact value.)
The sizing formula
To make a 20-pip win equal your target profit:
lots = target_profit / (20 pips × pip_value_per_lot)
Worked example. Balance $20, aiming for a 30% gain = $6 target.
lots = 6 / (20 × 10) = 6 / 200 = 0.03 lots
So a 0.03-lot EURUSD trade that hits +20 pips earns ~$6 — exactly one level. As the balance grows, the target grows, and the lot size grows with it. That's compounding in action (see the math).
The stop loss side
The 20-pip target pairs with a tighter stop set by the challenge's risk-to-reward. If you risk ~23% to make ~30%, the stop sits around 15 pips rather than 20. Your loss per trade is therefore a fixed percentage of the balance, by design.
Why doing this by hand is dangerous
Recalculating lot size every trade, under the stress of a live account, is exactly where humans slip — rounding up "to catch up" after a loss, or freezing and using the last size. Consistent, formula-driven sizing is something software does perfectly every time, which is a big part of why people automate the challenge.
Don't forget the floor and the costs
- Brokers have a minimum lot (usually 0.01). On a very small account, your computed size may round to the minimum — which changes the effective risk.
- Spreads and commission eat into the result; budget for them (see our broker guide).
Size by formula, never by emotion, and prove it on demo first. Our bot computes this automatically on every trade.