Position Size (Lot size) Calculator for Metatrader 4 (MT4) – download
Download Position Size Calculator for Metatrader 4:
How to install Position Size Calculator for Metatrader 4:
What is a position size calculator?
It is a calculator that calculates the position size of the position you should open.
When calculating the position size it takes into account the stop loss position and the risk you want to take with the transaction. This way you can be sure that when the stop loss is activated the loss will be consistent with your risk management (e.g. 1 percent).
Position Size Calculators and bad Risk Management
Position Size Calculator helps to remove the most serious errors in Risk Management. Not only beginner traders make them. These errors can be divided into two groups:
1) bad risk management for the whole account
Many traders do not understand the 1% risk rule. They open every position with the same 1% stop loss. However, if they open three trades, each with a 1% risk, their risk is the sum of the three trades.
The real risk with several trades is very difficult to track. That is why scripts like the position size calculator are helpful here. They calculate the risk for the whole account based on all open positions.
2) Bad risk management for a single position
The 1% risk rule is generally simple, but is often misapplied in practice. Let’s look at two types of approaches to the same 1% risk transaction:
- The trader opens a position at 1.14 level with a size of 3 lots. He calculates that based on the account size and the position size, his 1% loss will be 20 pips from the point of opening.
- Trader 2 wants to open a position at 1.14. He sees that the last hole was 50 pips lower. He believes that the best stop loss will be somewhere around 70 pips, just below the last hole. He calculates that for his loss at this point (70 pips lower) to be 1% of his account, he must open a 0.8 pip position.
Second trader has the correct approach. You calculate the position size based on the stop loss position.
What else to remember when managing risk?
An important remark applies to 1% itself. This is the best risk for many traders, but it does not necessarily mean that you have to apply 1% risk. There are traders who decide to take an even smaller one, e.g. 0.25, 0.5 percent per transaction. There are others who like to take a 2% risk. There are so many different systems and strategies for swing trading, day trading that you have to check yourself on historical data what risk profile is best for your trading style.
What is a position size calculator?
It is a calculator that calculates the optimum position size of a position so that the risk is within 1% or another given value.
Can I use other risk than 1%?
It depends on your strategy. If you think that the risk would be better, e.g. 2%, then you should check the historical data to see what results it has produced with your strategy.
How do I calculate the risk when I have several positions open?
You should take into account the maximum potential loss from all open positions and then calculate what is the risk in terms of amount and percentage. This is quite difficult to do on your own so scripts like the Position Size Calculator are helpful here.
Is the risk calculator built into Metatrader 4 (mt4)?
Unfortunately not. However there are many free scripts that will allow you to calculate the risk. Just download – e.g. from here – and install in Metatrader 4.
More about Position Size in trading, how to set position size
In this article I talk about how to calculate the position size for the trades you want to make. Here you will find a quick overview of how to select the right position variables for trading and how they work. To select the right position sizes in trading, you must first understand the basic requirements for position size.
The best position-determination strategy is not the same for every trader, and some traders prefer to keep trading rules as simple as possible. Perhaps the easiest position – order of magnitude technique involves only trading within a certain lot size and taking a larger lot whenever you take a position. If you are trading in a volatile market, you should use smaller lot sizes whenever possible, as the position sizes allow you to trade with a decline over a certain period of time. If all traders have trading opportunities, they risk about the same percentage, there is no need to use a static position variable.
It is not in the best interest of the investor to choose a random position size, so it is a good idea to set a uniform size for all trades. If you choose a high risk percentage (14%), how would you define the position variables to be used and how would you adjust them? This is a great way to evaluate the optimal position for a trade, but you don’t want to risk more than 2% of your account for each trade.
This model is very important in determining the position size for foreign exchange for a single trade, and you can set the risk percentage and dollar amount for each trade. As is well known, the trader can start from the bottom in a stock or commodity trade of 50 percent and determine position parameters. Assuming the stop is 40 pips (EUR / USD) and the trading build-up for EURO and USD shows that a stop loss of 40 pips is appropriate, then you would calculate the size of the positions. The risk of this trade is still 2% of your account size, so you need to build your risk on that basis and determine your position size.
To achieve the correct position size, the trader must first determine his stop loss margin or the percentage of the dollar amount he is willing to risk in each trade. To work with this information, investors only need to share the trading risk, which is 20%, with the account risk, which is 500%. The trader must underpin the math by first determining the trading risk of a trade of 50% of the account size, and then stopping at the loss of that margin. The position parameters are determined here and the traders have first determined whether there is a risk of 40 pips (EUR / USD) or 50 pipping (Euro / EUR).
Once you have the amount you can comfortably risk in any trade, you can combine these numbers with the place where the stop loss is to be placed, so that the number is a fixed dollar amount and the position size is determined. The size of the position can be determined on the basis of the account balance or on the basis of a single trade. The correct position size varies from trader to trader and may depend on the size of your account.
The other possible ways to calculate the position size would be to buy and sell a fixed number of CFD trades, allow fixed dollar amounts for each trade and vary the size of the trade depending on performance. This method of daily stop loss transactions can be adapted by newcomers with little trading history to determine the risk of a trade and the overall condition of the accounts for a correct position size.
A position size determination is the practice of taking a larger position when the eligible trade has a higher estimated probability of success. Using a position size strategy, a trader with a large portfolio would take a higher risk, while a smaller portfolio would take a lower risk due to the higher probability of success of the position size.
Assuming your trading account increases in tradability, the position size depends on how well you trade. You want to trade to collect profits on your account and adjust your position sizes to match the account size.
By having the right position for each trade, you can maximize your profits by minimizing the potential loss in risky situations. To manage the risk of ruining trading positions, we should manage to never lose size in a trade. By managing the risks associated with ruining trading positions and size management, I should never make major losses in any business. To manage the risk of ruin trading, we should manage to never lose size in every single trade.