Hi everyone, i have been cracking my head to calculate how much lot size i should use if i am planning to win 2% a trade. Could you help me with this?
Eample:
broker: icmarkets
platform: ctrader
currency: all currencies like eur, usd, gbp etc etc
Want to win $20 for each trade
Stoploss: 16 pips
Profit TP: 8 pips
In this senario, how do i calculate what the lot size should be taking into account spread,commission etc? So that i can plan and execute the correct lot size to win $20 after taking into account the spread and commission and leverage etc?
I cannot find a simple answer to this and seems i have to use many calculators but still i don’t know how to count include the spread and commission.
Could you tell me if there is a much simpler way to do this? Appreciate it. Thanks
Before you make another trade, your poor money management is the fast track to losing your capital.
Unless you’re a scalping trader with your eye on the lower TF charts, a run of losing trades hitting your S/L will wipe out your profitable trades in no time.
S/L 16 pips
T/P 16 pips should be your minimum Risk to Reward ratio.
As for your question, on a $1,000 account, I use a 100:1 leverage, with lot sizes from 0.03 - 0.09. Set the S;/L at twenty pips (200 points), and then manually move the S/Lon the chart to my 1-2% risk level. Which is around $20 maximum per trade.
Best of luck.
Hi I want to calculate lot size for profit , not stoploss.
As I posted, you’ll lose your account with your current set up. It doesn’t matter what lot size you’re using if your S/L is twice the size of your T/P.
I understand that. it’s a 2:1 strategy with high winrate. I want to backtest it . i have not done any live traders. Just want to know the lot size calculations or how to do it. And it’s a 5 min time frame.
That’s what demo accounts are for. Experiment. Cryptos trade 24/7.
How do you think I learnt what I needed to do ? I sure did it by googling my sticking points myself, which is what you should do if you want to become knowledgeable. And successful.
I’m being tough, because it’s something you can learn yourself.
Best of luck.
Steve do you have problem understanding? I just want to know how to make the lot size calculations. I’m not a newbie as you are assuming and i’m well aware of risk management. I just don’t know how to calculate the lot size for my mentioned situation. I just want to test the strategy out. I don’t know how much clearly i can be. Don’t worry about my risk to reward ratio. Don’t worry about me losing. If you don’t know , please ignore this thread.
First you need to calculate the 2% of your balance
Example 1000$ account–>Your risk= 1000 x 0.02 = 20$
Then you need to check the pip value of the instrument you are trading
Example EURUSD–>1 lot = 10$
Third you need to check the distance of your SL level in pips
Example you will set a SL which is 10 pips away from your entry point
After having these 3 calculated, then you may find the lot size suitable for your trade
In this case, you’re risking 20$ and you are setting your SL 10 pips away from entry point
–> lot size = 0.2
Why? because 0.2 lots = 2$ per pip
So if your trade hits your SL --> 2 x 10 = 20$ (as per your trading plan of 2% risk)
OR you may simply use this calculator:
20 USD divided by 8 pips yields pip value of 2.5 USD. 1 lot of XXX/USD pair has pip vaue of 10 USD. So the lot size you should use is 0.25 lot. For pairs, which have quote currency other than USD, pip value is 10 units of the quote currency, like 10 AUD in GBPAUD pair.
Multiplying 10 AUD by AUD/USD exchange rate (0.73) you will get pip value in USD for 1 lot of GBPAUD - 7.3 USD. As you want to get pip value of 2.5 USD per pip, the lot size should be 2.5/7.3 = 0.34 lot.
When the currency pair is quoted in terms of US dollars the equation is as follows; Lot Size = ((Margin * Percentage) ÷ Pip Amount) ÷ 100k. Using the example in the picture above for EURUSD; Lot Size = ((34,449 * 2.5%) ÷ 0.0029) ÷ 100,000 = 2.97 lots.