Calculating Lot Size

Calculating Lot SizeLesson 9 of 125 min read

Risk follows the stop

The consequence of a fixed size, stated in money. Hold the lots still and the percentage at risk moves with every stop you place.

Something has to move in this arrangement. With the size pinned, it is the risk.

The trade off, stated plainly

The calculation held the money constant and let the size vary. The fixed size does the opposite.

Same lots on every trade, so a wider stop simply costs more. Nobody hides this, and it is the price of the method.

Fix the size and the percentage at risk stops being fixed.

What it costs on gold

The 4,000 dollar account is sized at 0.05 lot. That is 5 ounces, so it moves 5 dollars for every dollar of gold price.

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