Basic Risk Management question

Hi all,

Forgive the basic question but when calculating position size, should you use your Balance or equity?

Thanks

Joel

Solely depends on you. Some would use Balance and some would use equity but it all comes down as to what you want. Whilst equity gives the true figure you own + unrealised profits or losses it changes and doesn't really measure your value because its variable but as for Balance- I think its actually better to use Balance since it what you own without realising running positions.

Agree with NtraderBM equity is varying and gets a little messy when there are multiple positions running. I would suggest you assign risk based on balance.

Equity if you never want to reach a balance of 0.

I think this is a little tricky, it depends what positions you have open already. Whether your open positions are in profit or loss. As a rule I would tend to use the balance to calculate lot size and SL etc.