Part II. Position Size Calculation. Commander in Pips: I’ve decided to make a small add-on to the money management chapter and still discuss the framework of position size calculation due risk provision. I remember that you’ve solved tasks about profit/loss and margin very well, so probably you can do this by yourself easily. I hope you don’t mind if I show you some examples. In fact, we have just one additional parameter – risk value in a single trade. All other calculations remain the same. I’ve decided to do a demonstration of why you need to calculate a safe amount to trade. Call out an entire platoon and load them all into one van. Pipruit: You’re right. Too many troops in too little space, and we could be missing a whole platoon in the next battle if one van has a flat tire. Some guidance initially doesn’t hurt. Commander in Pips: Very well, then let’s start with it. Do you remember what parameters we’ve used when we calculate profit/loss, margins and so on? Pipruit: I do, they are: - Currency pair that we trade; - Currency of our account; - Cross rates if we need to convert results into some other currency – neither counter nor base currency. Commander in Pips: Absolutely correct. Since we want to calculate not just the financial result but also the limit of potential loss in each trade and lot size, additionally we will need: - Total assets value on account; - Maximum acceptable loss value in percents in each trade; - Stop-loss value in pips.