Lot size from your risk %: the math in 3 lines, and a free panel that does it for you
Most blown accounts did not have a bad strategy. They had one trade that was ten times bigger than it should have been. The fix is to size every lot from the money you are willing to lose, not from a feeling.
The math
- Money at risk = balance x risk %. On 10,000 at 1%, that is 100.
- Loss per lot at your stop = stop distance x the value of one point for one lot. On EURUSD a 20-pip stop costs about 200 per standard lot.
- Lot = money at risk / loss per lot = 100 / 200 = 0.50 lot.
The catch is step 2: the point value is different for every symbol (gold, indices, yen pairs, crypto CFDs) and changes with the account currency. That is where people guess, and guessing is where the 3.00 lot trade comes from.
Let MetaTrader do it
TrueRisk Trade Panel is free. Type your risk (1 for 1%, or a fixed amount like 50), leave the stop on auto (1.5 x ATR) or drag the red stop line on the chart, and the BUY and SELL buttons already show the right lot. It also shows the money at risk and at the target before you click, places pending orders from an entry line, and has close-half, close-all and break-even buttons.
Free, no time limit: https://www.mql5.com/en/market/product/200808
If you also want the trade managed afterwards (half closed at 1R, stop to break-even, trailing stop) and a daily loss lock on the whole account, that is TrueRisk Trade Manager: https://www.mql5.com/en/market/product/200816
