How many lots should you trade?
We feel this is an important question that all traders should answer. While investing professionals recommend trading between 2% - 5% of account value per trade, the amount you decide to trade is your decision, and yours alone. However, deciding your risk level is only half the battle; translating that risk level into a number of lots is the other half.
The Risk Calculator created by IBFX is designed to calculate how many lots you should trade, given your risk percentage input, and display in real-time this amount on your charts.
This value is the number of lots you should trade (using the risk percentage level in the properties). This value will be different between currency pairs, as base currency and price per pip will vary between pairs.
This value shows you how many points it will take to reach your maximum draw down level (using the percentage set in the properties). Investing professionals recommend no more than 5% max draw down per trade (note: this is not to say your recommended stop loss should be 5%, but that under no circumstances should you lose more than 5%).
These values are to give you an idea of how much a trade will win/lose with the current contract size and TP / SL settings. The first value is the number of points set in the properties; the second is the dollar value (at current contract size); and the third value is the percentage of account gain/loss.
The Account Info section displays your account settings: leverage, account type and current equity.
To apply the indicator on your chart, simply drag and drop the "IBFX – Risk Calculator" from the Navigator window's "Custom Indicator" list. You will notice a blue rectangle on the top left corner of the indicator. This is what we call an anchor and was created to allow you to move the display anywhere on your chart. Simply double click on the rectangle and drag and drop it anywhere on your chart. Once the next tick comes in, the indicator display should reposition itself in the right location.
IBFX - Risk Calculator.ex4
Step 1: Download the setup file and double click on it. Follow on screen instructions.
Step 2: Select the tools you would like to install, click next. (Make sure to select your MT4 installation folder).
Forex trading is one of the riskiest forms of investment available and may not be suitable for all traders.
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