Forex Position Management #3 - Compound Position Sizing
read:2023/2/25 6:26:30
In thforextradingaccountsregistergforagoodliving.com">forextradingaccountstype lesson, we will teach you how to calculate the position size when the account forex trading accounts is not the currency in the currency pair you want to trade The account currency is not either of the currency pairs traded, but the relative currency in the converted currency Zhang San is back in the US, (we think he is actually a super spy, traveling around and saving the world) Today, he decides to To find the correct position size, we need to determine how much Zhang San is willing to risk (in pounds) Remember, currency pairs are valued in relative currencies. To find the correct position size for this situation we need to know the GBP/USD exchange rate assuming an exchange rate of 1.7500 since the currency of his account is USD, we need to convert the exchange rate and calculate the correct amount in GBP $50 * (￡1/$1.75) = ￡28.57 Now, the rest is divided by the stop loss points as in the other examples: ￡28.57/200 points = Finally, multiply by the known unit/pip value ratio: ￡0.14/pip * [(10,000 units EUR/GBP)(￡1/pip)] = about 1426 units EUR/GBP To be within a predetermined level of risk, Zhang San cannot sell more than 1429 units EUR/GBP Account currency is not any of the currency pairs traded, but the conversion currency of the The base currency Zhang San decides to go skiing in Switzerland, during which he uses his super spy phone to open a trading account through a local Forex broker. The value of 50 cashback forex francs converted to Japanese yen Since the account currency is the same as the base currency of the conversion, all we have to do is multiply it by the CHF/JPY exchange rate (85.00) 50 Swiss francs * (85 yen/1 Swiss franc) = 4250 yen Now, the rest is divided by the stop-loss pips as in the other examples: 4250 yen/100 pips = 42.50 yen/pips Finally, multiply the Known unit/pips value ratio: 42.50 yen/pips * [(10,000 units of Swiss francs/yen)(1 yen/pips)] = about 4250 units of Swiss francs/yen To ensure that the loss is less than or equal to 50 Swiss francs, Zhang San cannot trade more than 4250 units of Swiss francs/yen