Fixed Fractional Position Sizing for Linear Trading Systems

Summary

This article describes adding a fixed fractional money management scheme to an existing MQL5 trading system that uses fixed lot sizes. Position size is scaled in proportion to account equity and trade risk per contract, so the amount risked is intended to remain a chosen fraction of equity. The author places this logic in an object-oriented class that tracks equity growth and adjusts lot size as the account moves through growth levels.

The article illustrates the approach by applying it to a previously developed system and showing a Strategy Tester equity curve for a stated historical period. It supplies no numerical performance statistics in the text, and the curve alone does not establish future results. The author also cautions that geometric growth depends on the underlying system continuing to perform; if its linear behavior fails, the resulting system may become unstable. The method therefore depends on reliable estimates of trade risk and continued strategy performance.

Key ideas

• Fixed fractional sizing sets position volume in relation to current equity and per-contract trade risk.
• The article implements equity-based lot adjustments in an MQL5 class that tracks account growth.
• The method is applied to an existing fixed-lot system rather than developing a new entry strategy.
• The illustrated equity curve relies on the underlying system continuing to perform as expected.
• Position sizing does not remove the risk of losses or guarantee future performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.