How can I calculate lot size risking X% of account balance programmatically

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Gillorone
16
Gillorone  

I have written code the place a send order but I want to be able to calculate the lot size based on a few things. Given the entry price and stop loss, how can I calculate my lot size so that 2.5% of my current account balance would be risked on trades? 

I know how to calculate the number of pips between my entry price and stop loss:


double DiffInPips = MathAbs(NormalizeDouble(stopLoss-openPrice,Digits)/Point);

I believe it is needed to solve this, but not sure how to arrive at the desired lot size.

William Roeder
20210
William Roeder  
Never risk more than a small percentage of your account, certainly less than 2% per trade, 6% total.
  1. double DiffInPips = MathAbs(NormalizeDouble(stopLoss-openPrice,Digits)/Point);
    In code (MT 4): Risk depends on your initial stop loss, lot size, and the value of the pair. It does not depend on margin and leverage.
    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 You place the stop where it needs to be - where the reason for the trade is no longer valid.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.

Gillorone
16
Gillorone  
William Roeder:
Never risk more than a small percentage of your account, certainly less than 2% per trade, 6% total.
  1. In code (MT 4): Risk depends on your initial stop loss, lot size, and the value of the pair. It does not depend on margin and leverage.
    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.

Thanks. I believe that I should be able to arrive at a desired lot size with my percentage risk, stopLossPrice and entryPrice. I ended up doing this:


double DiffInPoints = MathAbs(NormalizeDouble(stopLossPrice-entryPrice,Digits)/Point);

double CalculateLotSize(double riskedPoints)  {
      double riskedAmount = percentageRisk/AccountBalance();
      return riskedAmount/riskedPoints;
      
  }


I want to use 

double NormalizeLots(double lots, string pair=""){
    if (pair == "") pair = Symbol();
    double  lotStep     = MarketInfo(pair, MODE_LOTSTEP),
            minLot      = MarketInfo(pair, MODE_MINLOT);
    lots            = MathRound(lots/ls) * ls;
    if (lots < minLot) lots = 0;    // or minLot
    return(lots);
}

in https://www.mql5.com/en/forum/146370#comment_3693988 but I don't know what "ls" represents. Pardon me, I don't seem to get this.

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Gillorone
16
Gillorone  
Gillorone:

Thanks. I believe that I should be able to arrive at a desired lot size with my percentage risk, stopLossPrice and entryPrice. I ended up doing this:



I want to use 

in https://www.mql5.com/en/forum/146370#comment_3693988 but I don't know what "ls" represents. Pardon me, I don't seem to get this.

I would really appreciate some help with solving this.
William Roeder
20210
William Roeder  
Gillorone: but I don't know what "ls" represents. Pardon me, I don't seem to get this.

You have minLot, lotStep, and maxLot.

If minlot equals 0.10 and lotStep is 0.01, then the only valid lot sizes are [0.10, 0.11, 0.12 … maxLot]

If minlot equals 0.10 and lotStep is 0.10, then the only valid lot sizes are [0.10, 0.20, 0.30 … maxLot]

If minlot equals 0.01 and lotStep is 0.02, then the only valid lot sizes are [0.01, 0.03, 0.05 … maxLot]

Gillorone
16
Gillorone  
William Roeder:

You have minLot, lotStep, and maxLot.

If minlot equals 0.10 and lotStep is 0.01, then the only valid lot sizes are [0.10, 0.11, 0.12 … maxLot]

If minlot equals 0.10 and lotStep is 0.10, then the only valid lot sizes are [0.10, 0.20, 0.30 … maxLot]

If minlot equals 0.01 and lotStep is 0.02, then the only valid lot sizes are [0.01, 0.03, 0.05 … maxLot]

For example, I made ls = 0.01.

I had a lot size of  5.136550615276671e-08 and when I used NormalizeLots() on the figure I got 0.0 as the result. I want to get the lot size to 2 decimal places, i.e 5.14.

William Roeder
20210
William Roeder  
Gillorone:

For example, I made ls = 0.01.

I had a lot size of  5.136550615276671e-08 and when I used NormalizeLots() on the figure I got 0.0 as the result. I want to get the lot size to 2 decimal places, i.e 5.14.

  1. You don't make lotStep anything. The broker states theirs.
  2. 5.136550615276671e-08 equals 0.00000005136550615276671. Not 5.14
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