Kim Jae Youn:
Never risk more than a small percentage of your account, certainly less than 2% per trade, 6% total to the account.
In code (MT4): Risk depends on your
initial stop loss, lot size, and the value of the pair. It does not depend on margin and leverage.
your account is 5000
Risk is 5%
and Worst Loss is 200
= proper lot size is 1.25 lot
- You place the stop where it needs to be — where the reason for the trade is no longer valid.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 - 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 - You must normalize lots properly and check against min and max.
- 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.
@William Roeder
Thanks for the info.
I have noticed you have replied to multiple posts with this same comment.
How's about a coded example??
Thanks
A
Anwar Ben: How's about a coded example??
How about you do the algebra and code it and show us your result? Should take you two minutes.
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WL = Worst Loss
R = % you want to risk
Bal = Balance
TL = Lot to trade
Formula
(Bal x R) / WL = TL
ex)
your account is 5000
Risk is 5%
and Worst Loss is 200
= proper lot size is 1.25 lot
If you have 10 EA, each lot size is 0.12(1.25/10)
Good case:
1. If your money increase to 6000, TL is 1.5(6000*0.05/200). Your trading lot size has increased.
Bad case:
1. If your money decrease to 4000, TL is 1((4000*0.05)/200).
2. If you suffer new high Loss(300), TL is 0.83((5000*0.05)/300)).
There is a lot of money management in trading world(Kelly, optimal F, etc). But I think this method is the simplest and best. Because other methods are complicated to use.This is anti-martingale money management. If you want to bet a bigger size, you have to increase risk or increase money.
source: The universal principles of successful trading (Brent Penfold)