Converting lot size between account leverage types - Double Check
Stephen Cattaneo: I am just looking for someone to double check my math as i am converting orders between accounts with different leverage amounts.
If you are worried about margin and leverage, you are not controlling your risk.
Never risk more than a small percentage of your account, certainly less than 2%
per trade, 6% total.
In code (MT4): Risk depends on your initial stop loss, lot size, and the
value of the pair. - You place the stop where it needs to be - where the reason for the trade is no longer valid.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
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Hello, I could not find this question in the forums already. I am just looking for someone to double check my math as i am converting orders between accounts with different leverage amounts.
Example 1. Amount of equity to keep accounts 1:1
The source account is 1:500 with 5k equity, to mirror the trades 1:1 in an account with 1:50 leverage i would need 50k equity? 500/50=10, 10*5k=50k?
Example 2. Convert an order of 1.5 lots size from a different account with different leverage.
Source: 1:500 with 5k equity.
Destination: 1:50 with 5k equity.
Using the math from Example 1, we would need 50k to be 1:1. The math is 5k/50k=.10, 1.5*.10=0.15. So the new lot size will be 0.15 to keep the same level of risk?
Example 3. Convert an order of 1.5 lots with same leverage but different equity.
Source: 1:500 with 5k equity.
Destination: 1:500 with 500(.5k) equity.
The math 500/5k=.10, 1.5*.10=0.15
LMK if anything is unclear. Just wanted to check this before i started to program anything.