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Your capital, your risk, your stop: the position size that risks exactly what you decided, converted into your account currency.
Size follows from risk, not the other way round: first set the amount you accept to lose if the stop is hit, then divide it by the stop distance multiplied by the value of one pip per lot. On EUR/USD, a pip is worth 10 dollars per standard lot of 100,000 euros; on yen pairs, the pip is 0.01.
When the pair does not contain your account currency, for example GBP/JPY on a euro account, the pip value has to be converted. The calculator does it by itself, at the reference rate published every day by the European Central Bank.
Brokers accept volumes in hundredths of a lot. Rounding up would risk slightly more than planned on every trade; over a losing streak, the difference adds up. The calculator therefore rounds down to the hundredth and shows the resulting actual risk.
Spread, commission and any slippage come on top of the calculated risk: with a very tight stop, they can be a large share of it.
