what's the correct method to calculate position based on % risk | Forex Factory

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what's the correct method to calculate position based on % risk

  • #1
  • First Post: Jul 26, 2011 4:59am Jul 26, 2011 4:59am
Been having a debate as to whether to use AccountFreeMargin or AccountBalance to calculate position size when using a risk percentage.
What is correct ? Using AccFreeMargin means taking floating losses AND profits into account, AccountBalance, neither, so which is best ?

Also the following is the code im using - can anyone confirm its correct for calculating position size ?

thx
Inserted Code
CalcLots = NormalizeDouble(MathFloor(AccountFreeMargin() * MaxRisk / 100.0 / (MarketInfo(symbol, MODE_MARGINREQUIRED) * LotStep)) * LotStep, 2);
  • #2
  • Jul 26, 2011 6:04am Jul 26, 2011 6:04am
Quoting pipmyride
Been having a debate as to whether to use AccountFreeMargin or AccountBalance to calculate position size when using a risk percentage.
What is correct ? Using AccFreeMargin means taking floating losses AND profits into account, AccountBalance, neither, so which is best ?

Also the following is the code im using - can anyone confirm its correct for calculating position size ?

thx
Inserted Code
CalcLots = NormalizeDouble(MathFloor(AccountFreeMargin() * MaxRisk / 100.0 / (MarketInfo(symbol, MODE_MARGINREQUIRED) * LotStep)) * LotStep, 2);
My understanding is that the MQL4 functions work like this:

  1. AccountBalance() = closed positions only
  2. AccountEquity() = closed positions + P/L on open positions
  3. AccountFreeMargin() = closed positions + P/L on open positions - margin consumed on open trades

You can also see all three of these values in the totals row of the Terminal.

IMHO, P/L on open positions should definitely be included, when calculating risk, hence I tend to use AccountEquity(). Including margin consumed is optional.

  • #3
  • Last Post: Jul 26, 2011 7:43am Jul 26, 2011 7:43am
thx hanover - i assume the code im using is correct ?
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