Fixed-Percentage Money Management

Fixed percentage requires a trader to designate a fixed percentage of equity as the maximum risk per trade. When an account is going down, this percent will represent a lower dollar amount of risk based on the account size. When the account is going up, this percent will represent the higher dollar amount based on the account size.

To calculate the number of contracts to trade according to fixed percentage, you would use the following formula:

image

For example, if you had USD15000.00 account balance and wanted to limit your risk to 2% of your account, you will face 150 pips risk. Pip value for EURUSD is USD1.00 (in mini account).

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The following table illustrates how the number of contracts traded changes with your account balance and the individual risk of each trade.

Account Balance

Fixed Percent

Fixed % dollars

Stop Loss

Contracts Added

Points

Pip Value

$$ Vol

Actual

Round Down

$15000

2%

$300

78

$1

78

3.8

3

$15000

2%

$300

156

$1

156

1.9

1

$15000

2%

$300

248

$1

248

1.2

1

$15000

2%

$300

387

$1

387

0.7

0

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