fixed 0.10 lots or size by stop distance?

[Shadow Trader]

Sizing a scalp can go two ways, and the results behave very differently.

Option A is fixed lots. Every trade is 0.10 lots, whatever the setup. Simple, fast, nothing to calculate in the heat of the moment. On EUR/USD that is roughly $1 a pip. A 5 pip stop risks about $5. A 15 pip stop risks about $15. Same size, three times the risk.

Option B is sizing by stop. Pick the money to risk first, say $10 a trade, then divide by the stop in pips times the pip value. Using about $10 per pip for a full lot: a 5 pip stop gives 10 / (5 x 10) = 0.20 lots. A 10 pip stop gives 0.10 lots. A 20 pip stop gives 0.05 lots. Risk stays at $10 each time.

Option A makes the account swing with whichever setup happens to have the widest stop. Option B keeps losses uniform, so a losing streak is a smooth line instead of a random mix of small and large hits.

The catch is that B means recalculating every time, and tight stops produce big lot sizes that run into spread and slippage costs, so a cap on maximum lot is worth having. Many platforms have a built-in risk calculator, and a spreadsheet works too.

Which one do you use, and has fixed lots ever bitten you on a wider-stop trade?