Money Management

introduction sfx offers several money management options to help traders control their risk and manage their positions effectively here's a short guide to the available options available money management modes 1\ fixed lots in the fixed lots mode, you specify a constant lot size for every trade, regardless of the account balance or market conditions example you set a fixed lot size of 0 5 lots for eur/usd every time a trade is executed, the position size will be exactly 0 5 lots, whether the account balance is $1,000 or $10,000 scenario if eur/usd moves 50 pips in your favor, and each pip is worth $5 per lot profit = 50 pips x $5/pip x 0 5 lots = $125 2\ risk percentage in the risk percentage mode, you set a percentage of your account balance, equity, or free margin to risk per trade the position size will be dynamically calculated based on your stop loss distance example you set a risk percentage of 2% of account balance for each trade your account balance is $10,000, and your stop loss is set at 50 pips scenario risk per trade = 2% of $10,000 = $200 lot size = risk amount / (stop loss in pips x pip value) assuming each pip is worth $10 per lot for eur/usd lot size = $200 / (50 pips x $10) = 0 4 lots if the trade hits stop loss, your loss will be exactly $200, or 2% of your account balance 3\ ratio and multiplier the ratio and multiplier mode uses a capital factor (k) to determine the position size relative to your account capital and risk profile example your provider balance is $10000 and lot size is 1 your account balance is $15,000 and capital factor is 3 scenario the calculated position size will be ratio = provider balance / provider lot size = 10000 lot size = user balance / ratio capital factor / 100 = 0 45 lots each trade will use 0 45 lots, based on your risk factor and account size 4\ provider x percent with ratio check mode in this mode, the lot size is a percentage of the trade recommendation from the trade idea provider, combined with a ratio check for risk management example the trade idea provider recommends a position size of 1 lot you set a multiplier of 50% and enable ratio check mode, which verifies that your lot size doesn’t exceed a certain ratio of your account size scenario lot size = 50% of 1 lot = 0 5 lots if ratio check mode determines that 0 5 lots is acceptable within your risk parameters, the trade will execute with this lot size 5\ provider x percent without ratio check mode this mode is similar to the previous one but skips the ratio check, using only the provider’s recommendation and your multiplier to determine lot size example the trade idea provider recommends a position size of 1 lot you set a multiplier of 75% , and ratio check mode is disabled scenario lot size = 75% of 1 lot = 0 75 lots the trade will execute with 0 75 lots, irrespective of whether the ratio check would have approved or rejected the lot size based on account risk these examples show how each money management mode can be applied to manage trades on the eur/usd pair effectively let me know if you'd like more information or have other scenarios in mind! additional settings max open orders you can set a maximum number of open orders for certain money management modes calculate lot size based on for certain modes, you can choose the basis for lot size calculation these money management options provide traders with flexibility to tailor their risk management strategy to their individual needs and trading style it's important to understand each option and choose the one that best fits your trading strategy and risk tolerance