How to calculate position size for oil? 1 lot of oil = 1 contract at HotForex. It doesn’t have units like currencies and metals. If I want to open an oil trade and want to risk $1000 and have stop loss of 200 pips how many lots should I buy or sell?
I also don’t know how to open a position for indices. If I want to risk $1000 on CAC40 and have stop loss of 200 pips how many lots should I buy/sell? Babypips school has explications only for currencies.
Hello str8!
I’m having the same problem. Have you found a solution to this yet? If yes please share.
Best is if you ask your broker as it may also depend on your account type. In a standard account (when you trade oil from a forex broker) when it comes to oil each penny should translate to $1 so if oil moves from $100 to $99 it will be $100 (in your case you should by 5 contracts). Again there are differences from broker to broker and account size to account size.
You can try the demo platform of the broker and play around with it. Place 1 lot and win/lose 10 pips to see how much that equates to. Then you can take that and multiply by 20. From there you can divide your $1000 risk by that number and that will give you the number of lots you should risk per trade.
Example:
10 pips on 1 lot = $15 (totally hypothetical)
200 pips = $15 x 20 = $300
No. of Contracts = $1000 / $300 = 3.33
So in this case you probably would only want to trade 3 contracts with a total risk of $900.
Hope this helps!
This is the position size calculator I’ve been using to trade oil & indices. Try it out, you won’t disappointed.