Risk Models and Intended-Price Sizing for Expert Advisors
Summary
The article explains how to make an expert advisor's risk definition configurable: percentage of balance or equity, a fixed cash amount, or a fixed lot size. It distinguishes monetary risk from volume, describes how drawdown scaling can apply across modes, and notes that fixed-lot risk varies with stop distance. Balance-based sizing ignores floating profit and loss, while equity-based sizing responds to it.
For order entry, the EA should calculate position size from the intended entry price, including for pending orders, then plan, validate against account and broker constraints, and execute the validated plan. The discussion highlights volume-step rounding, minimum lots, pending-order distance and margin estimates, and exposure checks that include pending orders. It presents implementation and log checks rather than comparative trading-performance evidence. Limits remain: risk is measured one trade at a time, portfolio correlation is not handled, pending margin can be inaccurate for hedging accounts with opposing exposure, and some broker assumptions and freeze-level handling remain incomplete.
Key ideas
- Percentage risk can be based on balance or equity, while fixed-cash and fixed-lot settings express different quantities.
- Fixed-lot sizing leaves the monetary loss dependent on stop distance and market conditions.
- Pending orders should be sized from their intended entry price rather than the current market price.
- Planning, validating, and executing a trade as distinct steps makes order behavior easier to audit.
- The described checks do not measure aggregate portfolio risk or correlated exposure.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.