Calculate Units Available

Trading Discussion
1

Hi All !

The units available are calculated in this way:

Account Size: $2,000
Leverage: 50:1

[B][U]Units Available Formula & Calculation[/U][/B]

Pair: EUR/USD


[B]= [(Account Size x Leverage)/Current Price][/B]



[B]= [($2,000 x 50)/1.30094] = 76,867 units of EUR[/B]

[B][U]Another Example[/U][/B]

Pair: XAG/GBP


[B]= [(Account Size x Leverage)/Current Price XAG/GBP]/Current Price GBP/USD[/B]



[B]= [($2,000 x 50)/19.97637]/1.6105 = 3,108 units of XAG[/B]

The above part I understand. But of course, we want to risk, let’s assume, only 2% of our account balance ($20). And out stop-loss is, say, 30 pips.

Now what would be the formula to calculate position size if we have risk % of 2%, leverage of 50 and stop loss of 30 pips in both pairs above ?

Thanks for your consideration. :slight_smile:

2

You are having the awesome position size calculator in babypips here.

Then why should we take more head ache ?


3

Hi Bijoy !

Thanks for your reply.

My arrogance, I am mixing leverage and units again and again :stuck_out_tongue:

4

Leverage doesn’t have any roll in deciding risk. it helps to trade higher lots with minimum margin. Risk is defined based on your stop loss and the pip value. Pip value is always directly proportional to your position size


5

Yeah forget leverage altogether and just focus on percentage risk. This leverage issue is so sickening already it’s got nothing to do at all with sizing.