Position sizing turns a stop loss into a fixed amount of money. Instead of choosing a lot size and hoping the loss is acceptable, you choose the loss and calculate the lot size from it.
Sample content, pending review by Bangrazka
Lot size = risk amount ÷ (stop distance × contract size × conversion to your account currency). The contract size is set by your broker for each instrument: commonly 100,000 units for major forex pairs and 100 ounces for gold, but always check your broker's specification.
Brokers allow sizes in steps, often 0.01 lots. Always round down, so the real risk stays at or below the amount you decided.
Balance $5,000, risk 1% = $50. Gold entry at 2,400.00 with a stop at 2,395.00 is a $5.00 distance. With a 100-ounce contract, one lot loses $500 over that distance, so the size is $50 ÷ $500 = 0.10 lots. The calculator on the Tools page does this for any instrument.