Deciding on position size

aj901512

Biedrs kopš 57 ieraksti

Oct 17, 2012 at 08:37

Biedrs kopš 57 ieraksti

- can someone explain me what is the best method to determine position size?
- should i use a different position size when i'm on a positive or a negative streak?
- should i set targets for changing position size?

i'm sure unserstanding the above will help me a lot with my forex trading!

aaa

Financialarts

Biedrs kopš 124 ieraksti

Oct 17, 2012 at 15:07

Biedrs kopš 124 ieraksti

Depends on stratigy :)
what s the stratigy u are using?

I believe most calculate their size based on the free margin or equity size.

I am the change in the market that causes you to lose :p / Watch out before I negative pip you! ^^

aj901512

Biedrs kopš 57 ieraksti

Oct 17, 2012 at 16:08

Biedrs kopš 57 ieraksti

i use different strategies, not so sucessful yet 😄.

using scalping, swing trading and some breakouts.

aaa

Financialarts

Biedrs kopš 124 ieraksti

Oct 17, 2012 at 17:11

Biedrs kopš 124 ieraksti

first get a winning stratigy then go worry about lotsizes ;)

I am the change in the market that causes you to lose :p / Watch out before I negative pip you! ^^

majid9511

Biedrs kopš 1 ieraksti

Oct 17, 2012 at 20:50

Biedrs kopš 1 ieraksti

Select one strategy and work with it and Explore out the positives and negatives of the strategy and then things will become clearer to you all
Good luck

j4byers

Biedrs kopš 6 ieraksti

Oct 18, 2012 at 00:38

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In my opinion, your position size should be based on what you're prepared to lose. You need to know your stop loss, account margin available, and percentage of account to risk in order to calculate.

So a basic calculation would be:
Size = PercentRisk * AccountMargin / StopLossPoints

For example,

Size = 0.02 * 100,000 / 100
= 20 Lots

So if your stop loss of 100 points (10 pips) were to be hit, you would lose no more than $2,000 or 2% of your account.

Be first, be smarter, or cheat.

nzkiwi

Biedrs kopš 33 ieraksti

Oct 18, 2012 at 06:31

Biedrs kopš 33 ieraksti

If you are winning bet the farm if you are losing just demo

10% month

nzkiwi

Biedrs kopš 33 ieraksti

Oct 18, 2012 at 06:45 (labots Oct 18, 2012 at 06:49)

Biedrs kopš 33 ieraksti

Here's an easy system. Account balance divided by 500. example $50/500= .1 Set stop loss at 16 and take profit at 10

after 1st trade if you win you now have $60 . $60/500 =.12 standard lots Set stop loss at 16 and take profit at 10
after 2nd trade if you win you now have $72 . $72/500 =.15 standard lots Set stop loss at 16 and take profit at 10
after 3rd trade if you win you now have $87 . $87/500 =.18 standard lots Set stop loss at 16 and take profit at 10

How much have you made after 10 winning trades??? All from just $50 of your hard earned money.

This system is not recommended for well funded accounts.

10% month

James_Bond

Biedrs kopš 541 ieraksti

Oct 18, 2012 at 09:42 (labots Oct 18, 2012 at 09:42)

Biedrs kopš 541 ieraksti

nzkiwi posted:
Here's an easy system. Account balance divided by 500. example $50/500= .1 Set stop loss at 16 and take profit at 10

after 1st trade if you win you now have $60 . $60/500 =.12 standard lots Set stop loss at 16 and take profit at 10
after 2nd trade if you win you now have $72 . $72/500 =.15 standard lots Set stop loss at 16 and take profit at 10
after 3rd trade if you win you now have $87 . $87/500 =.18 standard lots Set stop loss at 16 and take profit at 10

How much have you made after 10 winning trades??? All from just $50 of your hard earned money.

This system is not recommended for well funded accounts.

I think that's too much of a risk per trade. You shouldn't risk anymore than 5% of your account in one trade. Obviously, you can have a constant stop loss of 16 pips, so the lot size would have to be adjusted according to the required stop loss, so the loss won't be over 5% of your account's balance in case it happens.

James_Bond

Biedrs kopš 541 ieraksti

Oct 18, 2012 at 09:45

Biedrs kopš 541 ieraksti

majid9511 posted:
Select one strategy and work with it and Explore out the positives and negatives of the strategy and then things will become clearer to you all
Good luck

That's good advice.

aj, I think you're looking at the wrong thing at this time - as long as you don't have a winning system, tweaks of money management won't have such an enormous effect on your profitability as you might think of (unless of course you don't have a money management plan in the first place) - only after you find your successful trading system, tweaking the best risk:reward ratios and so on would help you to fine tune it.

Just my 2c.

forex_trader_43716

Biedrs kopš 326 ieraksti

Nov 02, 2012 at 19:49

Biedrs kopš 326 ieraksti

j4byers posted:
In my opinion, your position size should be based on what you're prepared to lose. You need to know your stop loss, account margin available, and percentage of account to risk in order to calculate.

So a basic calculation would be:
Size = PercentRisk * AccountMargin / StopLossPoints

For example,

Size = 0.02 * 100,000 / 100
= 20 Lots

So if your stop loss of 100 points (10 pips) were to be hit, you would lose no more than $2,000 or 2% of your account.

Agree 100%!

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Deciding on position size