Correct way to calculate lot size
- You place the stop where it needs to be - where the reason for the trade is no longer valid.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.
- 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.)
-
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. - You must normalize lots properly and check against min and max.
- You must also check FreeMargin to avoid stop out
Thanks William. The above function actually pays attention to all of the rules other than 5.I have intentionally ignored FreeMarginCheck() function usage because it can only be used in MQ4 expert advisors only.
1. It accepts a relevant stop loss distance defined by points ( Pips * 10) -
argStoplossPoints
2. It accepts a given risk percentage that the trader is comfortable with. ( if it 2% then the parameter value must be 0.02 )
argRiskDecimal
3. It calculates the lot size according to the risk and stop loss distance using MODE_LOTSTEP and not rely on unreliable MODE_TICKVALUE. ( MODE_TICKVALUE is not get updated by the Broker consistently )
Calculated lot size
_lotSize1 = MathFloor ( argRiskDecimal * _availableMoney / ( argStoplossPoints + argExtraPriceGapPoints ) / _lotStep ) * _lotStep;
4. It normalizes the calculated lot size against following 4 lot sizes.
Calculated lot size >= Minimum lot size allowed by the Broker.
Calculated lot size <= Maximum lot size allowed by the Broker.
Calculated lot size <= Maximum lot size possible with the current equity.
Calculated lot size <= Maximum lot size allowed by the trader.
Hey all!
I use this in all my codes to get a dynamic lot based on the risk I want to asume on each trade.
I'll leave it here, so it might be usefull to others and maybe improved.
double PipValue=(((SymbolInfoDouble(Symbol(),SYMBOL_TRADE_TICK_VALUE))*Point())/(SymbolInfoDouble(Symbol(),SYMBOL_TRADE_TICK_SIZE))); double stopLossPips=(1.5*atrBuff[0])/Point(); double totalLots=Risk*AccountInfoDouble(ACCOUNT_EQUITY)/(PipValue*stopLossPips); totalLots=floor(totalLots*100)/100;
I frequently use 1.5 ATR for placing stoloss, but you can change this to whatever your need is!
Regards,
PS
Yes Pedro,
I use 1.5 * ATR to calculate the stop loss distance too. Following is the custom indicator used in all my manual trading.
- www.mql5.com
Hey all!
I use this in all my codes to get a dynamic lot based on the risk I want to asume on each trade.
I'll leave it here, so it might be usefull to others and maybe improved.
I frequently use 1.5 ATR for placing stoloss, but you can change this to whatever your need is!
Regards,
PS
I have improved the lot size calculation mql5 code with the permitted maximum lot size for the margin. This is more like a final implementation of the lot size calculation.
The parameter definitions are:
pMarket: The market symbol
pMoneyCapital: The account balance
pRiskPercentage: Risk as a percentage; 1.0 means 1.0% risk
pStoplossPoints: Stoploss distance in points (not pips)
pAllowedMaxUnitSize: If you have a preferred maximum lot size
double CalculateUnitSize(string pMarket, double pMoneyCapital, double pRiskPercentage, int pStoplossPoints, double pAllowedMaxUnitSize) { //---Calculate LotSize based on Equity, Risk in decimal and StopLoss in points double maxLots, minLots, oneTickValue, moneyRisk, lotsByRisk, lotSize; int totalTickCount; maxLots = MaxUnitSizeAllowedForMargin(pMarket, pMoneyCapital, pAllowedMaxUnitSize); minLots = SymbolInfoDouble(pMarket, SYMBOL_VOLUME_MIN); oneTickValue = SymbolInfoDouble(pMarket, SYMBOL_TRADE_TICK_VALUE); // Tick value of the asset moneyRisk = (pRiskPercentage/100) * pMoneyCapital; totalTickCount = ToTicksCount(pMarket, pStoplossPoints); //---Calculate the Lot size according to Risk. lotsByRisk = moneyRisk / (totalTickCount * oneTickValue); lotSize = MathMax(MathMin(lotsByRisk, maxLots), minLots); lotSize = NormalizeLots(pMarket, lotSize); return (lotSize); } double MaxUnitSizeAllowedForMargin(string pMarket, double pMoneyCapital, double pAllowedMaxUnitSize) { // Calculate Lot size according to Equity. double marginForOneLot, lotsPossible; if(OrderCalcMargin(ORDER_TYPE_BUY, pMarket, 1, SymbolInfoDouble(pMarket, SYMBOL_ASK), marginForOneLot)) { // Calculate margin required for 1 lot lotsPossible = pMoneyCapital * 0.98 / marginForOneLot; lotsPossible = MathMin(lotsPossible, MathMin(pAllowedMaxUnitSize, SymbolInfoDouble(pMarket, SYMBOL_VOLUME_MAX))); lotsPossible = NormalizeLots(pMarket, lotsPossible); } else { lotsPossible = SymbolInfoDouble(pMarket, SYMBOL_VOLUME_MAX); } return (lotsPossible); } int ToTicksCount(string pMarket, uint pPointsCount) { double uticksize = SymbolInfoDouble(pMarket, SYMBOL_TRADE_TICK_SIZE); int utickscount = uticksize > 0 ? (int)((pPointsCount / uticksize) * uticksize) : 0; //-- fix prices by ticksize return utickscount; } double NormalizeLots(string pMarket, double pLots) { double lotstep = SymbolInfoDouble(pMarket, SYMBOL_VOLUME_STEP); int lotdigits = (int) - MathLog10(lotstep); return NormalizeDouble(pLots, lotdigits); }
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There are many different ways to calculate the lot size in MT4 platform. But most of the examples on the web are neither meaningful nor useful in a robust indicator/expert code. Following is the code I used in my indicators/experts to calculate the lot/volume size properly. Main advantage is this algorithm can be applied to all the markets/assets available for trading in MT4 platform. Ex. Currency pairs, Indices...