How much to buy w/2% risk of $1k and w/50pip SL?

[mcintyd1]

Originally Posted by MickMason

For simplicity I found it's easier to forget about margin and leverage.....

Your account is $1000
Your maximum risk is 2% ($20)
Your stop loss is 50pips
Divide $20 by 50pips = 40 cents per pip
Trade size 4k

Another example...

Your account is $1000
Your maximum risk is 2% ($20)
Your stop loss is 30pips
Divide $20 by 30pips = 66 cents per pip
Trade size 6.6k


Hope that helps


Mick

Mick's formula is right. Furthermore, to figure lot size, divide trade size by 100,000 (or take the $ per pip divided by 10). Lot size in first example is 0.04 and in second example is 0.066.

[Whathell]

doesn't teh dollar per pip change as the markets move?