Forex Position Size Calculator Methods in Forex Trading - Equity Management

FX Funds Management Methods - Forex Trading Position Size Calculator

The Position Size Calculator method is a method where you risk the same percentage of your equity balance per transaction - Account Management Techniques.

Forex Trading Position Size Calculator method says that there will be a certain percentage of your account equity balance that's at risk per trade. To calculate the % risk per each transaction, you need to know 2 things, the percent risk per trade and the Position Size - lot size of an open order so as to calculate where to put the stop loss order. Since the % risk is known, we shall use it to calculate the lot size of the trading order to be placed in the market, this is known as position size - Forex Trading Position Size Calculator.

Example - Forex Trading Position Size Calculator

If you have a account balance of $50,000 in your trading account and risk % is 2 %

Then 2% is equivalent to $1,000

If three traders buy EURUSD and the first one is using 20 pips stop loss, second trader is using 40 pips stop, third trader is using 50 pips stop, their trade size will be calculated as follows:

Trading Example 1: - Forex Trading Position Size Calculator

Stop Loss = 20 pips

Risk percent = 2% = $1,000

20 pips = $1,000

1 point = 1,000/20 = $50 dollars

Forex Position size is 5 lots (for 5 lots 1 point movement = $ 50)

Trading Example 2: - FX Trading Position Size Calculator

Stoploss = 40 pips

2 % = $1,000

40 pips = $1,000 dollars

1 point = 1,000/40 = $25

Forex Trading Position size is 2.5 lots (for 2.5 lots 1 point movement =$ 25)

Trading Example 3: - Forex Trading Position Size Calculator

Stop Loss = 50 pips

2 % = $1,000

50 pips = $1,000 dollars

1 point = 1,000/50 = $20

Forex Position size is 2 lots (for 2 lots 1 point movement = $20)

Other factors to consider include:

Maximum Number of Open Trade Positions

A final point to consider when trading is the maximum number of open trading positions - that is the maximum number of trade transactions that you as a forex trader want to be in at any given time. This is another factor to decide when managing your equity.

If e.g., you select a 2 % risk percent method, you may also say select to be in a maximum of 5 open trades at any one given time. If all 4 of those open trades close out at a loss on the same day, then you would have an 8% decrease in your account balances that day.

Get More Courses:

Trade Forex Trading

Forex Position Size Calculator Methods in Forex Trading - Equity Management

FX Funds Management Methods - Forex Trading Position Size Calculator

Other factors to consider include: