Lots and Positions Size as a Percentage | Forex Factory

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Lots and Positions Size as a Percentage

  • #1
  • First Post: Jun 14, 2012 10:54pm Jun 14, 2012 10:54pm
Lets say I have 50,000 to trade with and I want to trade 4% (2,000) of that account for 1 position and I am trading at 50:1 leverage.

How many lots is that?

Thanks for your help.

Best regards.
  • #2
  • Jun 15, 2012 12:33am Jun 15, 2012 12:33am
Quoting Riddermark

Lets say I have 50,000 to trade with and I want to trade 4% (2,000) of that account for 1 position and I am trading at 50:1 leverage.

How many lots is that?

Thanks for your help.

Best regards.
Do you mean you are prepared to risk 4%, 2,000?

If yes then divide 2,000 by your stop (for example 50 pips stop loss) which will give you a value per pip of 40. If we're talking USD then that would mean a trade size of 400,000 (4 lots) on something like Eur/Usd.

Or did you mean something else?
  • #3
  • Jun 15, 2012 12:58am Jun 15, 2012 12:58am
Position sizing requirements:

Account size = 50,000 units
Account Currency = x?
Risk = 4%
Stop Loss = x?
Pair = x?

For example:

Account is in GBP, SL is 40pips, pair is EUR/USD (base currency/quote currency):

Account currency pip value = risk*account size / stop loss distance
= (.04*50,000)/40 = 50pounds per pip

If pair has account currency as quote (eg. EUR/GBP)
Pip value per lot in pounds = 0.0001*100,000 = 10pounds per pip per lot
Position size = 50pounds/10pounds(per pip per lot) = 5 lots

If pair has account currency as base (eg. GBP/USD)
Pip value per lot in pounds = 0.0001*100,000/pair rate (eg 1.5510) = 6.45pounds per pip per lot
Position size = 50pounds/6.45pounds(per pip per lot) = 7.75 lots

If pair doesn't have account currency (eg. EUR/USD)
Pip value per lot in pounds = 0.0001*100,000*quote currency to account currency rate ( GBP/USD eg 1.5510) = 15.51pounds per pip per lot
Position size = 50pounds/15.51pounds (per pip per lot) = 3.2 lots
  • #4
  • Jun 15, 2012 3:11am Jun 15, 2012 3:11am
http://www.earnforex.com/position-size-calculator

This has always been a handy site to visit, and now the calculator is available for download - doe the calculations & display right on your MT4 charts!
It takes a lot for me to IGNORE you, but you can try.
  • #5
  • Jun 15, 2012 6:28am Jun 15, 2012 6:28am
The earnforex.com position size calculator indicator is very simple and easy to use and much better than doing it manually!
Attached File(s)
File Type: mq4 PositionSizeCalculator.mq4   10 KB | 735 downloads
  • #6
  • Jun 15, 2012 6:41am Jun 15, 2012 6:41am
Quoting Riddermark
Lets say I have 50,000 to trade with and I want to trade 4% (2,000) of that account for 1 position and I am trading at 50:1 leverage.

How many lots is that?

Thanks for your help.

Best regards.
All the leverage does is limit the potential size of the trade
In the days of old when sailors were bold, and seldom if ever contented.
  • #7
  • Jun 15, 2012 8:53am Jun 15, 2012 8:53am
Hi,

Thanks for the very detailed answers.

Something to note; I don't use stops. I bet small and let the positions run.

In this post link ;
http://www.forexfactory.com/showthre...24#post5472424

...the quoted person Alorente (author of thread) uses 4% per initial trade. In this example he said he only uses half his account to trade and keeps the other half in reserve. He took an example of 100K account. He trades 1/2 of that or 50,000 and his initial position is 4% of 50K or 2,000.

When you enter your trade you go into MT4 and hit "New order" button and the pop up comes up there is a drop down box. If I wanted to do the same thing as Alorente with 50K account at 50:1 leverage and a 4% position size or 2.000, how many lots do I choose in the drop down box before hitting buy/sell?

Thanks for your help.

Best regards.
  • #8
  • Jun 15, 2012 10:11am Jun 15, 2012 10:11am
Quoting Riddermark

Something to note; I don't use stops. I bet small and let the positions run.


...the quoted person Alorente
My best advice to you is don't walk away from that strategy........run!!
  • #9
  • Jun 15, 2012 10:30am Jun 15, 2012 10:30am
bear in mind that even using stops doesn't guarantee you get out when you want. I had a TP/SL set with live trade, some big announcement made out of the blue and the value shot well passed my TP and activated at about the double what I had set it at - ie more TP set than the system could cope with at one go. Fortunately I got double my expected pip profit but could easily of gone the other way and further. Not to set them at all is suicide. (Like to think this trade was skill but realistically it was just luck).
  • #10
  • Jun 15, 2012 11:44am Jun 15, 2012 11:44am
Please disregard that I don't use stops. The original description/question;

------------------------------------------

In this post link ;
http://www.forexfactory.com/showthre...24#post5472424

...the quoted person Alorente (author of thread) uses 4% per initial trade. In this example he said he only uses half his account to trade and keeps the other half in reserve. He took an example of 100K account. He trades 1/2 of that or 50,000 and his initial position is 4% of 50K or 2,000.

When you enter your trade you go into MT4 and hit "New order" button and the pop up comes up there is a drop down box. If I wanted to do the same thing as Alorente with 50K account at 50:1 leverage and a 4% position size or 2.000, how many lots do I choose in the drop down box before hitting buy/sell?

Thanks for your help.

Best regards.
----------------------------------------------

Thanks again for your input.

Best regards.
  • #11
  • Jun 15, 2012 12:25pm Jun 15, 2012 12:25pm
some folks there is no point in trying to teach them to fish - feed em today - and let them die next week in someone elses neighborhood....

use 8 10K lots if u want to put on a postion that uses approx 2K of your margin cash. if your broker is a micro - then put on 80 1K lots



Quoting Riddermark
Please disregard that I don't use stops. The original description/question;

------------------------------------------

In this post link ;
http://www.forexfactory.com/showthre...24#post5472424

...the quoted person Alorente (author of thread) uses 4% per initial trade. In this example he said he only uses half his account to trade and keeps the other half in reserve. He took an example of 100K account. He trades 1/2 of that or 50,000 and his initial position is 4% of 50K or 2,000.

When you enter your trade you go into...
In trading, there is no bullshit. You either make money or you don't.
  • #12
  • Edited 1:28pm Jun 15, 2012 12:59pm | Edited 1:28pm
Quoting mrgreen
some folks there is no point in trying to teach them to fish - feed em today - and let them die next week in someone elses neighborhood....

use 8 10K lots if u want to put on a postion that uses approx 2K of your margin cash. if your broker is a micro - then put on 80 1K lots
some folks there is no point in trying to teach them to fish - feed em today - and let them die next week in someone elses neighborhood....

Why does this discussion have to degenerate into stop loss/no stoploss debate.

There are many traders with a lot higher net worth that would disagree and use HUGE live accounts without stop losses. See Extreme TMA post 9999 ;
http://www.forexfactory.com/showthre...72#post5613472

Forexfactory has plenty of those other stop loss/no stop loss debate threads already.
  • #13
  • Jun 15, 2012 1:18pm Jun 15, 2012 1:18pm
There is no way to properly calculate position size without a stop loss. Without a SL you saying 'risk 4%' is meaningless. You'll have to ask Alrente what his position size is or $per pip is.

Let's say you use 4% of the 50k account as margin to open a trade at 50:1 leverage, no stop loss --- .04*50,000*50 = 100,000 = 1 lot. If your account is is USD and you trade a USD quote pair, then every pip is worth $10, if you are down 200pips then your account is down 4% and you can begin whatever recovery method you want over there at extremeTMA.
  • #14
  • Edited 3:09pm Jun 15, 2012 3:02pm | Edited 3:09pm
LOL- nothing to do w/ stop loss - calculating of your position is a basic in trading.... if u cant do the basic work to figure that out - how are u gonna do when the real work comes. There is a prev post in this thread that explained all u needed to know - but u didnt do the work.

Your stops - thats your personal preference - if u know what u are doing - then using no stopps is just fine. I don't use stops - - but thats a whole different story...

Quoting Riddermark
some folks there is no point in trying to teach them to fish - feed em today - and let them die next week in someone elses neighborhood....

Why does this discussion have to degenerate into stop loss/no stoploss debate.

There are many traders with a lot higher net worth that would disagree and use HUGE live accounts without stop losses. See Extreme TMA post 9999 ;
http://www.forexfactory.com/showthre...72#post5613472

Forexfactory has plenty of those other stop loss/no stop loss debate threads already.
In trading, there is no bullshit. You either make money or you don't.
  • #15
  • Last Post: Jun 15, 2012 6:52pm Jun 15, 2012 6:52pm
Quoting jeanlouie
There is no way to properly calculate position size without a stop loss. Without a SL you saying 'risk 4%' is meaningless. You'll have to ask Alrente what his position size is or $per pip is.

Let's say you use 4% of the 50k account as margin to open a trade at 50:1 leverage, no stop loss --- .04*50,000*50 = 100,000 = 1 lot. If your account is is USD and you trade a USD quote pair, then every pip is worth $10, if you are down 200pips then your account is down 4% and you can begin whatever recovery method you want over there at extremeTMA....
Thanks Jeanlouie. Thats what I was looking for. Alorente's position sizes are greater than what I currently use.

Best regards.
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