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Deciding on position size
Oct 17, 2012 at 08:37
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10 Replies
Oct 17, 2012 at 08:37
- 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!
- 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
Membro Desde May 30, 2012
124 posts
Oct 17, 2012 at 15:07
Depends on stratigy :)
what s the stratigy u are using?
I believe most calculate their size based on the free margin or equity size.
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! ^^
Membro Desde May 30, 2012
124 posts
Oct 17, 2012 at 17:11
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! ^^
Oct 18, 2012 at 00:38
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.
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.
Oct 18, 2012 at 06:45
(editado Oct 18, 2012 at 06:49)
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.
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
Membro Desde Jan 14, 2010
541 posts
Oct 18, 2012 at 09:42
(editado Oct 18, 2012 at 09:42)
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.
Membro Desde Jan 14, 2010
541 posts
Oct 18, 2012 at 09:45
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
Membro Desde Aug 06, 2011
326 posts
Nov 02, 2012 at 19:49
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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