How to decide about lot size when entering a trade?

[SloForeX]

I am wondering how you, other traders, are deciding about the lot size with regard to your account balance?

How do you know, how much risk is enough?

For example, having a $5.000 USD on 1:200 leverage. How do you decide how much margin will you use maximum on your balance?

[SIMBA]

SloForex

SloForeX:
I am wondering how you, other traders, are deciding about the lot size with regard to your account balance?

How do you know, how much risk is enough?

For example, having a $5.000 USD on 1:200 leverage. How do you decide how much margin will you use maximum on your balance?

Hi SloForeX.,

1-You have a tested system:then it goes without saying that you would

have tested out of sample for a "safe and profitable" position size based on the max drawdown that you have found OUT OF SAMPLE..if you have 5k and max tested dd for 1 lot is 4k,you better use 0.5 lots or 3*0.1 lots..try to stay below 20% drawdown..retest it with new position size and check if you will be comfortable with it

2-You don`t have a tested system...A-Don`t trade until you have one ..B-Rule of thumb use MAXIMUM 1 lot per every 15k in account C-If you know your stop,add spread and slippage and calculate the position size based on MAX RISK 5% of Equity..if you don`t know your stop..stop trading until you do

Regards

Simba

[WorldWideFx2]

https://www.mql5.com/en/code/30725

[William Roeder]

Risk depends on your initial stop loss, lot size, and the value of the symbol. It does not depend on margin and leverage. No SL means you have infinite risk. Never risk more than a small percentage of your trading funds, certainly less than 2% per trade, 6% total.

1. You place the stop where it needs to be — where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support.

2. AccountBalance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the spread, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.)

3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
             MODE_TICKVALUE is not reliable on non-fx instruments with many brokers - MQL4 programming forum 2017.10.10
             Is there an universal solution for Tick value? - Currency Pairs - General - MQL5 programming forum 2018.02.11
             Lot value calculation off by a factor of 100 - MQL5 programming forum 2019.07.19

4. You must normalize lots properly and check against min and max.

5. You must also check FreeMargin to avoid stop out

Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5 or 0.1 Lots maximum.