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Imagine planning a journey before checking the brakes Choosing

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trade size before defining the loss budget creates a

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similar problem Today we will not place a live

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order A hypothetical example takes us from a cash

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loss budget to an allowable position We will also

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see when the smallest permitted position is still too

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large The photographs provide context our inputs are not

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taken from a live account The deliverable is a

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reviewable calculation not a trading recommendation

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In an imaginary two-thousand-dollar account half a percent equals

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ten dollars That is an arithmetic example not a

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suitable percentage for everyone Margin supports a position the

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risk budget concerns an adverse price move and costs

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More leverage can reduce required margin without reducing the

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loss from the same movement on the same position

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Available margin therefore does not establish acceptable risk Calculate

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the exposure separately rather than using the largest size

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the platform permits

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Check the actual symbol specification contract size minimum volume

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volume step tick size and tick value One memorized

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formula is not reliable across every instrument The loss

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estimate must respect the contract and account currency MetaTrader

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provides a profit-estimation function but commission and execution

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assumptions need separate attention Specify the entry and exit

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quotes used so an included spread is not counted

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twice Invalid inputs must stop the calculation rather than

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produce an apparently precise size

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The hypothetical budget is twenty-five dollars Estimated stop loss

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is two hundred fifty dollars per lot and additional

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round-trip costs are ten dollars per lot Divide twenty-five

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by two hundred sixty to obtain about zero point

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zero nine six lots With a zero point zero

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one step round down to zero point zero nine

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Estimated risk is twenty-three dollars and forty cents Rounding

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up to zero point one creates twenty-six dollars of

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estimated risk and violates the budget

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If one-lot stop loss rises to five hundred dollars

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and costs remain ten the same budget allows less

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size Divide by five hundred ten and round down

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to zero point zero four lots estimated risk twenty

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dollars and forty cents If the minimum is zero

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point zero five skip the trade instead of arbitrarily

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moving the stop Both volume step and minimum must

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be respected This example assumes costs scale with volume

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minimum or nonlinear fees require a different calculation

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Define one R before entry for example the planned

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loss after size rounding and stated costs With R

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equal to ten dollars a twenty-dollar gain is two

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R and a fifteen-dollar loss is minus one point

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five R Several trades may share the same market

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driver Adding planned loss budgets does not guarantee the

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actual worst-case loss Gaps and slippage can exceed the

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plan Combined exposure and the decision to stop new

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entries require separate rules

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Pause and calculate using an eighteen-dollar budget one-lot stop

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loss of three hundred and costs of twenty per

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lot The step is zero point zero one Raw

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size is zero point zero five six two five

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and rounding down gives zero point zero five lots

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with estimated risk sixteen dollars Change minimum volume to

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zero point one and the answer becomes no trade

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Record inputs raw size permitted size and rejection reason

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in the worksheet