# Position size

Hello,

I just wanted to know more about the position sizes using a trading platform (e.g. FXCM)

If I had \$20000 to trade and wanted to buy \$80000 (4 leverage)of EUR/USD, would I need to convert that \$80000 to EUR to make it exactly equal 4:1 leverage?

• \$80000 therefore equals 53880 EUR
So would I input that as 53880 (can be 54000 rounded) for the trade?
Therefore I’m using around 4:1 leverage that is nearly exact?

Thanks:)

Yes. If you want to trade \$80,000 on EUR/USD you need to convert that into euros then trade whatever lot size equals that amount.

If it’s 54,000EUR then you need to trade .54 standard lots to equal \$80,000.

The real question is why you want to calculate your trades in such a confusing manner?

Ahh… thanks:)

I just thought that that was the way to calculate my trades. Does mostly everyone else do that as well?

No, most people risk a percentage of their account per trade. The most common percentage is 2%, meaning if your trade hits its stoploss you should lose 2% of your money.

Trading a flat amount without regard to risk will blow your account.

I see
Thanks!

2% of my total money or 2% of my leveraged-usable money?

WEll… I do the same… Is there any smarter way?

Yes I think we can do that:)

We just need to make sure that the position we’re taking agrees with our stop-loss order.

It’s the 2% of your total money you deposited in your account. Let say you deposited \$1000 and you trade standard lots (100 K).

1 Pip = \$10

So 2 % of your total deposit would be \$20.

\$20 / \$10(per pip) = 20 pips

you would set your stop loss at 20 pips every time you trade.

is the calculation method the same in direct quote and indirect quote?

Technically the 2% calculation will be off a little because we’re not factoring in the current exchange rate, but that doesn’t matter.

Your trade will always be somewhere between 1-4%, and usually between 1.5% and 2.5%, so it’s in a perfectly safe range.

If you want to bother with exchange rates and getting your trade to be exactly 2% you can, but it’s certainly not necessary.