Am I doing this right?
I want 2% risk on a €100 euro account with a risk of 100 pips on EUR/USD, micro lots(1000 units).
Risk: 100 * 0,02 = €2 risk.
Pip Value Calculator: 0.09 per pip
Risk Pip Value = €2 / 100 pips = 0,02 per pip.
Volume: 0,02 / 0,09 = 0,22
So I can enter in Metatrader at the volume 0,22?
Your math is correct (if we ignore some small rounding errors).
On the next to last line of your post, you calculate volume = 0.22 (or, as you say in Europe, 0,22).
This means 22/100 of one micro-lot, because you divided by the pip-value per micro-lot.
However, volume = 0.22 in Metatrader means 22/100 of a standard lot (100,000 units).
So, you have to enter volume = 0.0022 in Metatrader (if the Metatrader platform will allow such an entry).
It’s good that you want to know how these things are calculated. But, after you have learned the background math, it’s simpler to plan your trades using the Position Size Calculator – Position Size Calculator - BabyPips.com.
If you plug these metrics into the Position Size Calculator:
Account currency - EUR
Account balance - 100
Risk percentage - 2
Stop Loss - 100
Currency Pair - EUR/USD
Current Ask Price - 1.1757 (the price at the time of this post)
… then click Calculate,
… the Position Size Calculator will tell you that your Amount at Risk is 2 EUR, and the maximum position size you may trade is 235 individual units (which is 0.235 micro-lots).
The difference between the 0.22 that you calculated, and the 0.235 calculated by the Position Size Calculator, is due to the rounding errors mentioned above, and/or a difference in the EUR/USD prices entered.
I will use XM as broker. They offer special micro currencies with micro lots(for example microEURUSD), so is it still wrong then what I did? Also, does it matter if I calculated this what leverage I pick?
There are no micro currencies. There is no micro EUR/USD. There are micro-lots.
A micro-lot (1000 units) is 1/100 of a standard lot.
XM offers a micro-lot account, which is an account in which you can trade position sizes of
1 micro-lot, 2 micro-lots, 3 micro-lots, etc. – but not fractions of a micro-lot.
In the example you gave in your first post, above, you calculated that your position size can be no larger than 0.22 micro-lots. In other words, less than 1 micro-lot. XM will not accept a trade that is smaller than 1 micro-lot.
So, your math was basically correct, but your desired position size (0.22 micro-lot) does not conform to the requirements of your platform.
If you change your stop-loss to 20 pips (keeping all the other metrics the same), you can trade one micro-lot.
If you increase your account balance to €500, you can keep your stop loss at 100 pips, and you can trade one micro-lot.
Test these numbers for yourself, using the Position Size Calculator.
As for leverage, when you “pick” a leverage amount, you are choosing to place a limit on the leverage you may use. If you know how to determine position sizes based on your risk percentage and your stop loss, then placing an arbitrary limit on your leverage makes no sense.
But, to answer your question, if you want to trade one-micro-lot position sizes in an account with a balance of €100, you must have at least 10:1 leverage available, because you are intending to trade positions which are 10 times the size of your balance.
I don’t get it, in metatrader you can enter volume but what do I need to enter exactly? For example €500 balance, 2% risk and 100 pips stoploss. What volume do i have to pick and which lot? And if I don’t want to trade with levarage, do I have to pick 1:1? Because if I use with €100 a 2% risk 100 pips stoploss the stoploss will not be the same as with 5:1 right? Then it will be 20 pips?
In the book that I am reading:
But how do they get onto the 10.65 micro lots? I get the $795 part but I don’t get how they translate that into 10.65 pips.
The paragraph you quoted makes no sense to me. It says,
This is just plain stupid.
$795 is your risk amount (in this example), and risk amount does not determine position size.
Position size is determined by (1) account currency, (2) account balance, (3) risk percentage,
(4) stop-loss in pips, and (5) the currency pair you are trading.
The correct position size for the example you quoted is 15.9 mini lots (not 10.65 mini lots, as the book said).
Here is the answer, as determined by the Babypips Position Size Calculator –
Here’s another problem with the book you are reading –
After the book determined (incorrectly) that the position size should be 10.65 mini lots, it went on to incorrectly state that a position size of 10.65 mini lots = $106,500. Wrong, wrong, wrong, because the pair being traded is AUD/USD.
10.65 mini lots of AUD/USD is worth $92,655 based on the AUD/USD price used in the example, not $106,500 as stated in the book.
(10.65 mini lots) x (10,000 AUD / mini lot) x (0.87 USD / AUD) = $92,655
But, that’s using the incorrect 10.65 mini lot figure from the book.
Let’s use the correct position size, 15.9 mini lots, to determine how much it is worth in dollars –
(15.9 mini lots) x (10,000 AUD / mini lot) x (0.87 USD / AUD) = $138,330.
Throw that book away, and begin studying the Babypips School of Pipsology.
Perhaps the exchange rate has adjusted since the book was written ? - However , I admire your patience 
Thank you very much! If my trading account is on standard lots I have to enter by volume 1.59 with the calculate you did? And how can i deal with chaning currency’s, if I see that I can trade something but its moving very fast, how can i set a 50 pip stop loss then? Because its chaning all the time.
[quote=“Jelvooo, post:8, topic:118742, full:true”]
Thank you very much! If my trading account is on standard lots I have to enter by volume 1.59 with the calculate you did?[/quote]
If you were trading the large position (in the large account) that was described in the book example – then, yes, you would enter 1.59 standard lots as “volume” in MT4.
If you are trying to chase a fast-moving market, there is no time to construct a fancy order to enter at a particular price, with associated stop-loss and take-profit orders attached. In this situation, your only option is to use a naked market order to enter – that is, a market order without stop-loss or take-profit.
After your market order is filled (and it will be filled at some price, even in a fast-moving market), then you add your stop and limit orders.
Sometimes I’m on 4 hour but it always moves, so its hard to get 50 pips precicely.
I think you’re agonizing over the fact that you can’t place a trailing stop precisely 50 pips away from a fast-moving price.
It’s true, you can’t do that, so get over it.
Here’s what you can do.
[U]Example[/U]:
The market is moving fast (it doesn’t matter what time-frame you are using). Let’s say the market is falling, and you want to enter SHORT as quickly as possible, and you want to protect your position with a 50-pip stop-loss.
You enter a naked MARKET ORDER (a market order without a stop-loss or take-profit attached). Let’s say you click SELL when the BID price is 1.1700 and your order is filled at 1.1685 – 15 pips below the price you were trying to get (as I said, it’s a fast-moving market). You now have a SHORT position at 1.1685 with no stop-loss.
You want to add a stop-loss to your position, so you place it at 1.1735 – 50 pips above your entry price. You have now limited your risk on this trade to 50 pips, which was your intention from the beginning.
If the current price continues to move down, you might choose to lower your stop to reduce your risk.
If the current price moves down to 1.1635 – which is 50 pips below your entry price – you should lower your stop to 1.1685, which is break-even, to eliminate your risk.
If you want a 50-pip trailing stop, as the price continues to move downward, then wait for a pause in the price movement, and lower your stop to 50 pips above the current price.
