The EASY Way to Calculate Lot Size in MT4 (and MT5)

[Music] hey guys kieran here today we're going to have a look at how to simply calculate lot sizes in mt4 before we get started let me of course mention my trader seed program if you want to get a funded trading account go to trader c dot io or click the link in the description and we can start working together so lot sizes in mt4 this is one of the questions i get asked all the time by trader seat program all runs uh the accounts run on mt4 mt4 is a very good tool in terms of flexibility and customization however it lacks some very basic functionality which you will find in other platforms and the main thing i feel that it lacks is a good way to um position size based on on your risk um so to do this we are going to have to download an external tool a third-party tool so i'm going to show you that tool we're going to download it we're going to install it i'm going to show you how it works it's very simple to do so let's get started so what we're going to do is go to this website here and forex now this indicator has nothing to do with me i haven't got an affiliate link or anything so i'm just going to put this link in the description below this video so this is the position size calculator you can read through all the functionality of this yourself it's extremely flexible there's loads of different things it can do which go way beyond the scope of this video today i just want to keep it simple to get people up and running with basic position sizing i'm going to show you one cool thing at the end how to position size based on atr but i want to keep it nice and simple so we're going to do is going to go to this this link and we're going to scroll all the way down to the download section which is here coming up here it is so downloads you can download it for mt4 and mt5 we're going to download it for mt4 so it's downloaded down here we're going to click it and here's our folder click inside our folder and there will be three files here okay so all we're going to do to install this is we're going to copy all three files we're going to go into our mt4 we're going to go to file open data folder then into mql4 then into indicators and we're just going to paste the files here okay so these are the three files that i just pasted and we are going to need to compile this file here so this one that's mql source file to compile all we're going to do is double click on this it's going to open up the code okay so it's opened up the code here all we need to do to compile it is just click the compile button up here make sure there's no errors so zero errors zero warnings so that's all and we're good to go so we can just close this close this and all we're going to do is just right click on indicators and hit refresh and the indicator if we expand this now position size calculator should show up here here it is so we're going to do right click attach to chart um what we'll do initially there's lots of different options here you can play around with um but just to keep it simple we're just going to keep everything default and click ok so now you can see that we have this interface here which is similar to what you would find on other trading platforms and we also have additional lines here where we can set the stop loss and take profit just by dragging the lines around here so for example now we are on dollar yen on the daily time frame let's say that we wanted to take a short trade on dollar yen so we would say entry short so it's showing us the current price here is 105.600 let's say we wanted to make our stop loss at 106. okay we put that in there and let's say we want to risk a thousand dollars on this trade a thousand dollars in here in risk usd and as soon as i enter this you're going to see the position size in lots change so for a thousand dollars our lot size is going to be 1.96 lots okay so we can also position size based on risk let's say we want to have exactly the same position short the dollar yen um and we want to risk let's say five percent stop loss has moved here let's do 1.106.000 um the risk we want to say let's fight say five percent five percent and that the lot size to rift five percent of our account which is two thousand five hundred dollars will be six point eight four lots so i hope that's pretty simple um let's do a long example so to switch this to long we want to go long the dollar yen with a stop loss at let's say 1 05 we want to risk 500 on this trade so if our stop loss gets hit at 105 we're going to lose 500 so to do that we're going to need a 0.86 lot size okay so like i said before we can position size based upon uh the stop loss by just dragging this so if we this is a long trade like we have but let's say we want to have a wide stop loss down here at 103 around here we're going to let go of that here see 103.060 and this is now populated our stop loss is 103.060 we're going to risk 500 and it's given our position size as 0.2 lots and that's basically it that's how simple it is to use um one other cool thing i want to show you though before i go is how to calculate position size based on the atr of the time frame uh that you are interested in so what we're going to do to go back into the settings of this indicator we're going to right click we're going to go on to position size calculator edit and we're going to be back into the tool so we're going to ignore all of these you can play around with these as much as you want but i'm going to ignore them and all i'm going to do is is check the show atr options i'm going to change that to true i'm going to hit okay and you now see that we have some additional options here atr period stop loss multiplier atr atr multiplier atr time frame so what this allows us to do is set our stop loss uh not basis arbitrarily where we feel like we want to place a stop loss this is going to always give us a stop loss at the atr of the selected time frame so if you're not familiar with atr atr is the average true range this is just a very simple um let's say volatility calculation which looks at uh so we have the atr here set to 14. so what this is going to do is look at the 14 previous candles on this time frame and it's gonna measure from the height and the low of each of those 14 candles and give us an average so we know over the last 14 periods this is how much a candle tends to move and based on that information that gives us a broad idea of the current volatility in the market and we can set our stop loss uh based upon that which is an excellent way to position size particularly when you're trading multiple markets because every market will have a different volatility and this is a way to consistently size your positions across multiple markets something i highly recommend so the atr will change depending on what time frame we use so in the tool here like i said before we're currently on the daily time frame and you can see here the atr time frame is currently at daily level so we'll leave it like this initially so we have the atr period set to 14 which you can just leave as default and what we're going to do is we're going to say the stop loss multiplier we're going to set as one so what this is going to do is give us a one atr stop bet on the base on the daily time frame so what we're saying here is the atr on the daily time frame is 0.601 so all this is going to do is it's going to look at our position look at our entry and it's going to put our this is a long entry it's going to put a stop loss 0.601 away from our entry so you can see here 601 the green line here this is where it's placed our stop loss 601 pips it's just moving because the market price is moving here away from our entry as our atr now let's say we wanted to have a wider stop loss we could use a weekly atr for example and all we need to do to change that is click on the atr time frame change the time frame from daily click on it and now you've got a weekly time frame and now the atr is 1385 pips much bigger we can change it to a monthly and it's down here now 3 369 pips so this is now a very wide stop loss but the key is is automatically changing the atr based upon which time frame we select and of course this works with the position size so let's say we wanted to have a stop loss at the monthly atr and we wanted a risk let's say a thousand dollars our lot size is going to be 0.3 lots so let's say we wanted to instead of using one atr we wanted to use two atr we could switch this stop loss multiplier to two uh and let's change the atr time frame to maybe the hourly chart or let's say the four hourly chart so h4 is a four hourly chart so now we're using a stop loss placed at the foot the four hour atr times two that's automatically placed at 640 l pips away we're going to be risking 1 000 usd so our lot size is 1.63 so i hope that makes sense um using the atr as a stop loss uh like i said before is an excellent thing to do however you don't need to do it so if you just want to calculate lot size um very basically just leave all the settings at default and you can use the position size to calculate exactly how i demonstrated there so i hope that's been useful um i hope you make good use of the position size calculator i find it very useful myself if you have any questions leave me a comment below make sure you check out trader seat dot io click the link in the description for huge discounts on ftmo funding come and get a funded account and work alongside me subscribe to the channel i have plenty of videos about ftmo and funded trader programs like the video and in the meantime i wish you good luck [Music] you

Channel: Funded Trader Life - Kieran

Views: 43,457

Keywords: funded trader program, funded trader, funded trader life, funded trader starter session, best funded trader programs, topstep funded trader, funded traders review, funded trading, funded trading account, professional trader, professional trader india, top step trader funded, trading funded account, FTMO, FTMO Review, FTMO tips, FTMO Funded Trader, mt4, metatrader 4, lot size, position size, mt4 position size calculator, mt4 lot size, mt4 position size

Id: JciejKIgN94

Length: 12min 3sec (723 seconds)

Published: Tue Aug 04 2020