Risk-Based Position Sizing for XAUUSD Trades

Summary

This document describes a MetaTrader 5 indicator for sizing gold positions from a chosen account balance, risk percentage, entry price, and stop-loss price. It applies a standard risk-based calculation using the stop distance and the instrument’s tick value to estimate the lot size intended to lose the selected risk amount if the stop is reached. The panel also displays the risk amount, stop distance, risk/reward ratio, and potential profit, with optional chart lines for entry, stop, and take-profit levels.

The indicator can read contract size from the broker’s symbol specification, or use a manually supplied value. Its inputs include an optional take-profit and display settings. The document gives no performance study or independent validation of the calculation. Actual risk may depend on broker contract specifications, execution, slippage, and the accuracy of the price and account inputs. It is presented as a calculation aid rather than a trade signal or profit guarantee.

Key ideas

• Position size is calculated from account balance, chosen risk percentage, stop distance, and tick value.
• The stop price determines the distance used to estimate loss at the selected lot size.
• The indicator displays calculated risk and potential reward information on a chart panel.
• Broker contract specifications and input accuracy affect the calculation’s practical usefulness.

Tags

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