How to Calculate the Correct Lot Size

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TFTC Lot Size Calculator Script

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#494: How to Calculate the Correct Lot Size

In this video:
00:27 – What lot size should I use? 
01:04 – Doing it all wrong
02:30 – Get a copy of my Lot Size Calculator script
04:35 – Losing trades will be equal money now
05:08 – Blueberry Markets is my broker of choice
05:50 – Future discussions

Calculating the correct size for your trader is vitally important to your trading success. It can make or break you as a trader. Let’s talk about that and more right now.

Hey there, traders. It’s Andrew Mitchem here at the first trading catch with video and podcast number 494.

What lot size should I use? 

So a lesson for you for this week. I was approached by somebody via email a couple of days ago, not a client. And he said to me, Andrew, can you help me out? I’m really struggling with my trading. And he was just tearing his hair out, couldn’t really figure out what was going wrong.

Yeah, low win rate and was just losing trade after trade. And I said, look and show me some of your trade results. Maybe like export your trade history through to me and I’ll take a look at it for you to see if there’s anything obvious I can see to assist you.

Doing it all wrong

Now the thing that stood out so obviously, and of course I didn’t know his strategy, I didn’t know why I was entering the trades or anything like that.

But the obvious thing, the first thing that I looked at is that every single trade that he was taking had the same size and he was this placing 0.1 lots and he was placing on every single trade. It didn’t matter what the currency pair is, what the direction, what the stop loss size was, and or even different markets. Every single trade had the same 0.1 lot size.

And I went back to him and said, here’s an obvious flaw in your trading, because have you noticed that some of your losses are enormous and some of your gains are really tiny and when you have losses, they’re all over the place. There’s, you know, some big losses. There’s smaller losses. And same with your gains. You know, you might have a profitable gain, but it’s tiny.

And compared with the loss that you just take him on the last trade. And he said, oh, the reason I do that is because it’s easy. I put 0.1 lots on every trade. And I said, So what’s the reasoning? You know, apart from being easy? I said, Well, that’s all I’ve ever thought to do. And I suppose it’s easy.

And when you look online, people calculate their pips and they think that they’re doing well. If they have positive pips. And he just put the same size on every single trade.

Get a copy of my Lot Size Calculator script

So I said to him like, here’s the first thing you can do. Go to my website and download my lot size calculator. It works on MT4 or MT5 and it’s freely available to you.

And if you don’t already have it, I strongly suggest if you use the MT4 or MT5 platform, you go and download it. It’s a script and it’s been downloaded tens and tens of thousands of times over the last probably been on my site about 12 or 13 years. Now, unlike some calculators which are really slow and cumbersome to use, this is fantastic.

It’s a script and all you do is drag it onto the chart that you are trading right now. So let’s say you’re trading the EUR/USD. You drag the script on. The script knows your account size, the balance. It knows that denomination of your trading account, such as if you’re trading in the USD or JPY or NZD or GBP, whatever CAD, whatever it is that your account or denomination is, it knows and all you’re doing because you’re dragging it onto the EUR/USD chart.

It knows you’re trying to trade the US dollar, so therefore it knows the dollars per pip that you get paid on that particular pair in your currency of your account. So all you have to do is put it in the stop loss, stop loss in pips of that trade. It’s defaulted to half of 1% risk. But you can make that anything you like.

But what you do is literally put in the stop loss press. Okay. And it will tell you the exact size that you need to place on that trade. So if that trade goes wrong with the stop loss size that you’ve just told it, it will lose the default half of 1% of your account on that trade if that trade were to go wrong.

It’s so easy. It literally takes like 10 seconds, if that, to calculate it and to use it and it tells you the exact level you need. Very, very clever piece of software, highly recommended.

Losing trades will be equal money now

And what that would do and what I told this guy, what it will do for him, and it will mean that every single trade that you have will have a losing trade, will have the same risk level, the same percentage risk, or the same monetary loss if the trade goes wrong.

So it doesn’t matter if you have a trade on the EUR/USD with a 30 pip stop loss or a trade on the EUR/USD with a 125 pips stop loss, it doesn’t matter because every trade you will have equal and controlled and low and known risk really imporant when you do that.

Blueberry Markets is my broker of choice

So you’re either looking for a really top quality broker and you’re after an MT4 or MT5 broker out there.

I can highly recommend blueberry markets they based over in Australia across the ditch for me. I’m in New Zealand, but you can open an account with bluerberry markets It doesn’t matter where you live in the world. There’s a few countries you cannot. Unfortunately, the US is one of them, but there’s a few other countries. But for the vast majority of people listening to this and watching this, you can open an account with blueberry markets.

I’ll put a link to them on this page and on this post, as I will do so. So you can go and get a freely available my size calculator script. Do both have a look? They’ll be on this page.

Future discussions

So if you would like me to discuss anything like this, just like this guy did this week on future videos and podcasts, if you have any trading issues or any difficulties, anything you don’t quite understand.

All you need to do is send me an email to [email protected] or leave a comment here if you’re watching on YouTube or any other platform and I will definitely help you out by making a future video and podcast about the subject that you need help with to help you out the best I can.

So once again, this is Andrew Mitchem here at the Forex Trading Coach. I see this time next week by for now.

Episode Title: #494: How to Calculate the Correct Lot Size

TFTC Lot Size Calculator Script

Find out more about Blueberry Markets – Click Here

Find out more about my Online Video Forex Course

Join my webinar for new traders

Join my webinar for the more experienced trader

Podcast: Play in new window | Download

Subscribe: Apple Podcasts | Spotify | Android | iHeartRadio | Blubrry | TuneIn | RSS