In this article, I will teach you how to calculate the best fixed lot size for Scalping Forex for any account size and balance in 4 simple steps.
1. Build Up a Trading Watch List
In order to accurately calculate a proper lot size for scalping Forex, you need to know the exact Forex pairs that you trade.
You should create a list of trading currency pairs.
If you are scalping just one pair, simply skip this step.
For the sake of the example, imagine that you trade only 4 major USD pairs:
EURUSD,
GBPUSD,
USDJPY,
USDCAD
2. Do Backtesting
Backtest every forex pair in your watch list and find at least 5 trading setups on each pair based on the rules of your trading strategy.
Also, remember that the more setups you will find, the more accurately you will calculate the best lot size for your scalping strategy.
EURUSD
Here are 5 trading setups on EURUSD that meet my entry criteria.
After that, you should calculate a pips value of a stop loss of each trade.
GBPUSD
Below, you can see 5 trading setups on GBPUSD pair.
And here are the stop losses of each trade in pips.
USDCAD
Now, USDCAD pair. Again, here are 5 trading setups, meeting the entry rules.
You can see the stop loss of each trade in pips below.
USDJPY
And finally, 5 setups on USDJPY pair.
And here are the stop losses of these trades.
3. Find Biggest Stop Loss
Among these 20 trading setups, you should find the trade with the biggest stop loss.
The biggest stop loss is 15 pips on USDJPY pair.
4. Measure a Lot Size
Open Forex position size calculator.
For the sake of the example, we will take a free position size calculator on Myfxbook website.
Fill all the fields.
In currency pair input, the forex pair with the biggest stop loss - USDJPY in our example.
Account currency - your account currency, let's take USD.
Account size - your account size, let's take 10000$.
Risk ratio - that will be the risk % of your trading account per trade, input 1.5%.
Stop Loss - input a pip value of the biggest stop loss that you found - 15 pips.
And click calculate.
That will be the best lot size for scalping Forex with your trading strategy.
The idea is that our maximum loss will not exceed 1.5% of the trading account balance.
While the average risk per trade will be around 1%.
Before you start scalping Forex on a real account, it is very important to know how to properly calculate your risks. Scalping with the fixed lot, this technique will help you to calculate the best lot size for your trades.
