Summary
Highlights
The video introduces three strategies for position sizing: using a set lot size, calculating lot size for each trade, and full porting (which is strongly discouraged). The main focus will be on the second option: calculating lot size per trade.
The speaker demonstrates how to calculate lot size using the 'Stinu' app for Forex pairs and gold. Users input their account balance, risk percentage, and stop loss in pips. The app then provides the exact lot size to use.
The video then moves to an online calculator suitable for both Forex and S&P 500. It covers how to input account balance, stop loss in pips, and risk percentage. A crucial step for the S&P 500 is determining the 'contract size per lot' from the broker's platform (e.g., MetaTrader 4/5) details, as this can vary and significantly impact trade size.
The speaker explains how to easily identify the stop loss in pips directly from the trading chart's short position tool, making it straightforward to input into the lot size calculator.
This section introduces the speaker's preferred method: using a set lot size. This involves determining a minimum usual stop loss (e.g., 400 pips for S&P 500) and using that to calculate a standard lot size that risks 1% of the account. This fixed lot size is then used for all trades, meaning potential risk percentage can fluctuate depending on the actual stop loss for each trade.
The video concludes with the speaker's advanced strategy of having three set lot sizes: 'normal risk' (1% risk), 'de-risk' (50% of normal for high-impact news or uncertain market conditions), and 'confident' (double normal for high-conviction setups). The speaker strongly advises new traders to only use 'normal' or 'de-risk' lot sizes until they are consistently profitable and experienced.