Forex Position Size Calculator Methods in Forex Trading - Forex Money Management
Forex Money Management Methods - Forex Trading Position Size Calculator
The Forex Trading Position Size Calculator method is a method where you risk the same percentage of your account balance per transaction - Forex Trading Account Management Techniques.
Forex Trading Position Size Calculator method says that there will be a certain percentage of your forex account equity balance that is at risk per trade. To calculate the percent risk per each forex trade transaction, you need to know two things, the percent risk per forex trade and the Forex Trading Position Size - lot size of an open forex order so as to calculate where to put the stop loss order. Since the percent risk is known, we shall use it to calculate the lot size of the trading forex order to be placed in the forex market, this is known as position size - Forex Trading Position Size Calculator.
Forex Example - Forex Trading Position Size Calculator
If you have a forex account balance of $50,000 in your trading forex account and risk percent is 2%
Then 2% is equal to $1,000
If three forex traders buy EURUSD and the first one is using 20 pips stop loss, second forex trader is using 40 pips stop, third forex trader is using 50 pips stop, their forex trade position size will be calculated as follows:
Forex 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
Forex Trading Position size is 5 forex lots (for 5 trading forex lots 1 point movement = $ 50)
Forex Trading Example 2: - Forex Trading Position Size Calculator
Stop loss = 40 pips
2% = $1,000
40 pips = $1,000
1 point = 1,000/40 = $25
Forex Trading Position size is 2.5 forex lots (for 2.5 trading forex lots 1 point movement =$ 25)
Forex Trading Example 3: - Forex Trading Position Size Calculator
Stop loss = 50 pips
2% = $1,000
50 pips = $1,000
1 point = 1,000/50 = $20
Forex Trading Position size is 2 forex lots (for 2 trading forex lots 1 point movement = $20)
Other factors to consider include:
Maximum Number of Open Forex Trade Positions
A final point to consider when trading is the maximum number of open trading forex positions - that is the maximum number of forex trades that you as a trader want to be in at any one given time. This is another factor to decide when managing your forex trading account capital.
If for example, you chose a 2% forex risk percent method, you may also say chose to be in a maximum of 5 open forex trade positions at any one given time. If all 4 of those open forex trade positions close at a loss on the same day, then you would have an 8% decrease in your trading forex account balances that day.
