Help calculating lot size

thread: Help calculating lot size

  1. #1
    Junior Member Noemi2704's Avatar
    19

    Help calculating lot size

    Hi All, I need help, but I am a little ashamed to say the least

    I am struggling to work out lot size based on leverage and ceases and account size.

    Seeing as the brokers aren't that good at honouring ceases, what I wish to do is utilize minimal allowable balance to be utilized as an automatic stop...

    So, let us say I have US3000 in my account, I would like to exchange and risk 50% of the account, together with my planned stop loss being 20 pips such as and my account is about 1:400 leverage.

    How can I work out my lot size in order for the broker to close my trade due to minimal equity requirements no more being met while the trade is in the gap by 20 pips. . .does which make sense?

    Hope some one can help

    Thanks

    Hannes

  2. #2
    Junior Member Noemi2704's Avatar
    19
    Hi Hannes, it is pretty easy once you get used to it. Alright, so it depends on what type of account you have, can it be a miniature, micro or standard account? I'll presume it is a micro in this circumstance. So let's say you want to risk 50% of your account on a single trade (which will be mad for what it is worth) you simply divide 1500 (50% risk) by 20 (pips). So every pip in this case can be worth $75. That would be 7.5 normal lots for most currencies. In the event that you were calculating a much more standard risk amount like 2%, you simply multiply 3000 by 0.02 (2%) that...
    Hi there Tradedream, many thanks for your reply, I love it.

    I really don't know whether I am going about this arse about face though (ito explaining what it is I want to perform)

    I know what it is that you've explained. . .but. . .doing it this way, will it result in my trade being closed by the broker because of margin call / equity amount stop out if I reach that level of 20 pips in reduction? Can you believe it, I haven't been able to find a losing trade of 30 pips. . .perhaps I should exchange like that constantly

    I just don't trust my broker to close out my place with a stop, so that I thought if I do it this way round, they will shut it automatically...

  3. #3
    TradeDream,

    That was an AWESOME Excuse dude.

    But today for the perplexing part (like figuring lot size was not enough), where does margin fit into the equation? 1:25 and 1:400 are two very different creatures.

    He tackles this one gets a blue ribbon and a tee shirt in engaging net outlets...j/k

  4. #4
    Junior Member CarPattney's Avatar
    26
    quote Hello there Tradedream, many thanks for your reply, I appreciate it. I don't know whether I'm going about this arse about face though (ito describing what it is that I want to do) I know what it is you've explained. . .but. . .doing this way, will it lead to my commerce being shut by the broker because of margin call / equity level cease out if I reach that level of 20 pips in reduction? Would you believe it, I have not been able to come across a losing commerce of 30 pips. . .perhaps I should exchange like that constantly I just don't trust...
    Hannes, I really don't think you should be worries about the brokers and your stops, I have been trading now for over six years and the only time your stops will behave dodgy is generally around big news evens where liquidity can be a little crazy. Check it out, only risk 0.5% or 0.25% working with the calculation I showed you and put your stop 20 pips off or anything, and allow price hit your stop. You will lose some money but it might help you conquer your anxiety. Bear in mind a stop position is like any other position, it's only an order on the market. When there's someone else at the price on the other side of your trade (which there almost always is), you are going to be taken out.

    Ocd, margin is quite distinct but only becomes a problem when you're trading just like a crazy man!

    I mean, if I'm risking no longer than just 1 or 2% on my trading account, the account margin really doesn't matter. So say my account would be 1:400 like in your example, it merely means that I'm required to add much less of a security deposit in my account to exchange bigger lot sizes. That is a non-issue if I'm not trading like a maniac, and when I'm just prepared to risk small %'s of my account.

    One of the very popular brokers at 200:1 leverage says you just want $5 margin on your account to exchange $1,000 lots (micro-lots). That means on your example, if my account just had 25:1 leverage, in case my account obtained under $40, I'd get a margin call and the open commerce would be shut.

    I do not think anybody who is seriously trading to get long term outcomes with reasonable risk limits should fret about it too much to be honest, I never have.

  5. #5
    Junior Member ThatWeedDude's Avatar
    28
    Hello HannesJoub,

    The thread is very old nonetheless diallist compiled a wonderful rundown of those calculations including examples and goes farther to cover matters such as asymmetrical leverage for when you feel like getting right into the particulars. There's a lot of other great information in there as well I hope you find valuable.

    https://www.cliqforex.com/trading-sy...g-gu-wave.html

  6. #6
    If I were risking 50% per trade, I would not need to worry about lot size for very long....
    //-----

    enivid has a very good internet based http://www.earnforex.com/position-size-calculator.... And, as ordinary for him, he even went so far as to provide the http://www.earnforex.com/metatrader-...ize-Calculator free for us...h

  7. #7
    Junior Member Bluuws's Avatar
    26
    Net and explanation calculator.

  8. #8
    Junior Member CarPattney's Avatar
    26
    Hi Hannes, it's pretty simple once you get accustomed to it.

    Alright, so it depends on what sort of account you have, can it be a mini, micro or standard account?

    I'll assume it's a micro in this circumstance.

    So let's say you need to risk 50% of your account on one trade (which is mad for what it's worth) you simply split 1500 (50% risk) from 20 (pips). So each pip in this case could be worth $75. That might be 7.5 normal lots for most currencies.

    If you were calculating a much more standard risk amount like 2%, you simply multiply 3000 by 0.02 (2%) which gives you $60. Then you divide 60 from 20 (pips risk) and you'll be able to see that each pip move has to be worth $3 or less, which is 3 mini-lots or 0.3 in certain MT4's.

    Hope that helps, as I said, with some practice you'll be calculating these very quickly

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