How To Calculate Lot Size - trading, crypto, stocks
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- Опубликовано: 26 дек 2021
- Trading is not simply about buying as much as you can afford, then hoping for the best.
No, we need to determine:
- how much we are comfortable LOSING in any single trade
- how much we can AFFORD to lose in any single trade
- how many losses we can suffer before we RUN OUT of money
To do this you need to understand how much you are prepared to risk on each trade. People use different methods to work this out. For example some people use the 3% rule, whereby they only ever risk 3% of their entire account, on any one trade. While others, trying to get rich quick, will risk 50% of their entire account, which only after a couple losses seriously kills their ability to trade.
Whatever method you use, and what ever amount that is, be it $5, $50, $500, $1000, whatever, you then need to calculate how many BTC, or DOGE, or Tesla(TSLA), or Apple(APPL), you need to buy/sell such that you only risk that amount.
In this video I show you the formula to do this, and I give you two examples.
Ex #1 is a LONG trade on BTC.
Ex #2 is a SHORT trade on BTC.
As per my comments at the end of the video, I have created a spreadsheet to help you calculate the above without having to do the math yourself. The spreadsheet will also allow you to calculate using Leverage, and Exchange Fees. So keep an eye out for that and the instructional video that will follow.
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Thanks for watching.
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Man.... I'm a new trader, been studying since Oct 21 and I can't tell you how long I've been searching to find a simple explanation to position size. This is excellent..well done, great tutorial. Makes perfect sense now.
Great to hear. Cheers.
I agree Bro..🎉❤ me too I've search a lot.
Awesome buddy. Perhaps the most important part of day trading and no one is teaching this. Thanks man.
❤❤❤Thank you so much Bro this is what I've been lookin for. I see a lot of complicated calculation but this is the best so far. Thank you so much ❤❤❤
Wow thanks man, that's a great video and great explanation😀 this helped me a lot
Thanks man. So informative and helpful ❤
Hi there and thanks for this video. Is this the formula already applied using the long/short tool from tradingview ? thanks
good vid! straight to the point not to much talking
Instant subscriber 👍
Nice video... I think the main pressing issue is knowing what a 2X leverage represents in lot sizes. Is it 5x leverage to 5 lot sizes and 10x leverage to 10 lot size?
this works for cryptos, in the otherwise for most everything else it's just the distance given by the measuring tool=stops divided by the risk amount usd= lot size
Really nice video clip. What is the meaning of trade direction?
great video bro, trying to dial this in right now
Cool, glad it's useful.
Couples things how would those of us that use the mt4 app calculate cause we dont have that tool also i have a 50+$ account they say u shouldnt risk more then 2% thats about all ik reguarding the lot stuff somewhat
what is 0.05 with BTC/USD does it represent £0.05p or £0.50 ??
Is this the same calculation on forex and indices?
What if the account size is less than what is allowed by lot size ?
Is there a simple way of doing this? Just wondering. Thanks a bunch! It helped!
ah.. not sure how much simpler you need it.. maybe time to get into bots
@@citizentraderx1741 I was wondering if there was an indicator or tool where it gets the Entry and the Stop and calculate everything. Something like a built-in calculator. Great explanation though!! Thank you!!
@@cesarg63 don't know.. maybe search if someone has scripted one.
Please does this work for Btc/Ltc or other cryptocurrencies against others etc eth/ltc so on and so forth?
Meanwhile thanks for the video..
just a question whats the maximum lot size possible
How much money do you have? That is the determining factor for max lot size possible (for you).
This is the lot size for MT4 ?
The calculation is not platform specific.
Great video where is the actual calculator spreadsheet link?
sorry, I only had it on the next video.. but here it is for you
www.etsy.com/au/shop/CitizenTraderX
misleading and erroneous . How if Lot size is 4 or 5 ?? example capital is 40000 USD , BTC current price is 37543 and SL 37305 ,gap is 238 USD , risk is 1000 , so 1000 divide by 238 = 4 ..........How to understand this ? what is 4 ??
short you sell 0.055 BTC not buy !
it would be much simpler to buy in the actual currency that you have, instead of lots/volume. No need for calculations .