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money management in forex

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sathish kumar
4437
sathish kumar 2015.05.12 13:13 


Lot size choosing tips:

1,Trade risk should be 3 to 5% on every trade.

2, lot size should be choosed based on stoploss pips not by profit pips

Example : capital is 1000$.. then u r risk capital is 30(3%) to 50$(5%)

Formula choosing lot size : (Risk capital/ stop loss pips) *0.1 : lot size

 Example : risk capital per trade :50$ , stop loss pips : 60 pips

Lot size (50 $/60)*0.1     :   0.08 lot

Alain Verleyen
Moderator
30755
Alain Verleyen 2015.05.12 14:52  
sathish kumar:


Lot size choosing tips:

1,Trade risk should be 3 to 5% on every trade.

2, lot size should be choosed based on stoploss pips not by profit pips

Example : capital is 1000$.. then u r risk capital is 30(3%) to 50$(5%)

Formula choosing lot size : (Risk capital/ stop loss pips) *0.1 : lot size

 Example : risk capital per trade :50$ , stop loss pips : 60 pips

Lot size (50 $/60)*0.1     :   0.08 lot

Your formula is only right for pair with USD as profit currency (like EURUSD or GBPUSD...) and for account with standard lot (1 lot=100,000 Unit of base currency).
sathish kumar
4437
sathish kumar 2015.05.12 15:00  
Alain Verleyen:
Your formula is only right for pair with USD as profit currency (like EURUSD or GBPUSD...) and for account with standard lot (1 lot=100,000 Unit of base currency).

it is common rule . but risk should be 3%  to 5% for any currency or cfd or equity.

cross pir has different pip value.

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