Position Sizing on multiple orders

Beginner Questions
1

Hi can someone please explain me how position size works on multiple orders.

I am demo trading and put buy stop and sell stop orders on 2 currencies at the same time. If my equity is $10,000. 00 and my risk is 5% how much should my lot size be?

Thanks

fadaid

2

If I understand your question, you want to take 2 separate positions, one in currency pair A, and one in currency pair B. You want to limit your total risk on the 2 positions (combined) to 5% of your $10,000 account balance. And you want to know how large each position can be, without exceeding your 5% total risk exposure.

If I have re-stated your question accurately, then the answer is this: [B]you must choose[/B] how much risk to allocate to each position. Position size calculators and formulas cannot make this choice for you.

You might choose to risk 2½% on each position; or 2% on one of your positions, and 3% on the other; or some other allocation.

Once you have decided how much to risk on each position, then 2 separate calculations (using the Position Size Calculator) will tell you the maximum size of each position, based on your criteria.

3

Thank you very much.