It is quite possible to calculate the lot yourself. Perhaps in another article, we will discuss how to do this. In the meantime, we will talk about a number of tools that will automatically calculate the necessary transaction volume.
Trading Calculator
Perhaps this is the most obvious way. Many brokers have a trading calculator on their websites and FXCL Markets is no exception. This program is quite easy to use. You need to specify several parameters:
- Currency pair
- Leverage
- Account currency
- Transaction volume
Once you state the mentioned indicators you’ll get the additional information on your transaction:
- Contract size
- Spread
- Margin
- The cost of one pip or point
Knowing the value of a point, you can make the calculations of the required transaction size in lots. Let's say you decide that you are ready to risk 1% of your capital per transaction with a risk-to-reward ratio of 1:3. If your balance is $1,000, then you can risk $10 per trade. If you set Stop Loss at 10 points from the entry price, then the cost of 1 point in your case should be $1. Using the calculator, you will find out that the cost of 1 point will be equal to $1 with a lot size of 0.1 for the EURUSD pair.
Indicators
It is not always convenient to return to the broker's website during trading each time you need to calculate the lot size. If your trades’ settings are constantly changing then it will be much more convenient for you to see the necessary data directly in the trading terminal. There are a few useful indicators for this. They are all easy to use and similar in operation. Let's look at the main ones.
Lot
A very convenient and quite comprehensive indicator. You enter the key indicators of your transaction into the program:
- Risk per trade (percent of total capital)
- Stop Loss and Take Profit size in pips
The program automatically calculates the following indicators:
- Lot size
- Potential profit and loss based on SL and TP
- The price of a pip in USD
Also, you can choose settings for your indicator, including the color and size of the font and the location of the window in your trading terminal.
ArgoLotCalculator
This program is similar to Lot described above. Well, all the programs on our list will be similar, but I want to provide you with a wide range. This way, you can decide which indicator suits all your preferences.
ArgoLotCalculator shows Stop Loss and Take Profit sizes. The risk volume is based on the SL size. You will see three lines on your chart:
- Entry price
- Stop Loss
- Take Profit
You can move the lines directly on the chart. The data in the indicator, including the required lot size, will change accordingly.
There is an indicator that works in a similar way - PositionSizeCalculator. This program includes even more settings. Depending on what you prefer, simplicity or detail, you can focus on one of these indicators.
Calc File
You can use this indicator to compare several options depending on the given conditions. You can specify three different Stop Loss levels and three different risk levels in percent. The program will calculate the lot size and the cost of 1 point for each of the situations. Later you can choose the best option.
i-UrovenZero
An extremely multi-functional indicator that contains detailed information on each of your transactions, including the lot sizes you need, as well as Stop Out levels and even breakeven levels. I would probably need a separate article to give you a more detailed description of this program. If you need complete information about your account and open transactions at hand, then i-UrovenZero is a perfect tool for this.
Infopanel TSLS_mod1
You can also enter three different parameters in this indicator for comparison. Here you indicate three possible lot sizes and the program will calculate the cost of one point for you. Knowing how much you are willing to spend for 1 transaction, you can choose the required lot size.
The indicator has a large number of functions and settings. It includes a huge variety of trading instruments, including metals.
MAX_LOT
This program is slightly different from others. The indicator takes into account your capital and calculates your maximum lot size based on your leverage.
Other Indicators
Of course, the list of programs does not end there. There are a number of indicators that calculate the lot size for you based on standard data:
- MaxLot
- LotCalculator
- lot size calc
- lot_profit
- lot calculator
- balance %
Final Words
On Forex, the incorrect calculation is a gross mistake of any novice trader. If the size is too high, you can lose tens of times more than you expect. At too low - you can earn at times less than you estimated.
Perhaps with experience, you will calculate all this in your mind but at first, it’s important to use handy tools. Always enter trades wisely. Good luck!