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Track Portfolio Risk with Position Size Calculator

October 6, 2014 by

You can now track your whole portfolio risk with the Position Size Calculator indicator for MetaTrader. The indicator now calculates the potential loss of all the open positions and pending orders across the account and shows it to the trader.

Traders can control whether to count pending orders or not and whether to count orders and positions without stop-loss or not. Four values are calculated: current portfolio risk in account’s currency, the same value as percentage of balance or equity, potential portfolio risk in account’s currency (existing risk plus the risk of the trade suggested by Position Size Calculator), and the same value as percentage of balance/equity.

When no stop-loss is entered for a sell order/position and the Calculator is set to count no-stop-loss orders, the potential loss is infinite. It is displayed as a special case. Unfortunately, the indicator cannot account for hedging orders.

Portfolio Risk Display in Position Size Calculator

Of course, the new feature can be easily turned off via indicator’s input parameters.

If you prefer not to use MetaTrader, you can still use the web version of the position size calculator. Unfortunately, it is not as good as the MetaTrader one.

If you have any suggestions or wish to report a bug for this MetaTrader indicator, please do so using the commentary form below.

2 Responses to “Track Portfolio Risk with Position Size Calculator”

  1. Cory Mitchell

    What would be AWESOME is in an indicator did all this and factored in correlations. I poked around and didn’t find anything. For example, you are long the EURUSD but also long the USDCHF…risking 1% on each. If the daily correlation is at -95, then the indicator /program lets you know your risk is more toward 0% than 2% (since the trades are acting as a hedge to one another.

    Since correlations fluctuate it may be difficult to implement, and the figures it spits out would still need to be taken with a grain of salt, but it would be cool to see.

    Reply

    Andriy Moraru Reply:

    It won’t even take into account if you go long on EUR/USD and then go short on EUR/USD. It will count those as two different positions. It is nearly impossible to calculate those hedged positions properly in MetaTrader. Doing the same with correlations to other pairs would be even more difficult.

    And besides, the point of risk calculation is to limit the maximum loss, while correlation is not reliable enough to be accounted there at all.

    Reply

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