Forex Volume Calculation

When placing a trade using the Metatrader 4 platform, as well as specifying my Stop Loss, I also need to specify the Volume which will determine how much I am risking (and how much I will make if the market goes my way).

For Forex trades I use an online calculator, for example https://alpari.com/en/trading/calculator/

In this example I want to be long (Buy) the EUR JPY:

Entry Price: 112.97 (which I put in “Opening Price”)

Stop: 112.58 (which I put in “Closing Price”)

Volume: 0.05

With this volume, it is stating my risk (“Profit”) is $19.20 which is what I want ($4000 account, I want to risk 0.5% which is $20).

If the risk is not what I want it to be, I simply change the volume and re-calculate until I know the volume I want.

Calculating Volume For Non-Forex Markets

But I have an issue.

When I want to trade other markets (Gold, the Dow, Caterpillar, etc), how do I calculate the volume as I haven’t been able to find an equivalent online calculator to the Forex calculator I use above.

In Metatrader 4 you can right click a market in the Market Watch window and select “Specification”

Deutsche Bank Trade Volume Example

This will give you all the specs for the market, e.g. for Deutsche Bank bank

Contract Size * Tick Value * Tick Risk * Volume Step
1 * 0.01 * 6 * 1

Entry: 13.30
Stop: 13.51
Tick Size = 0.01, hence risking 21 ticks

I want to risk $20, so calculation is

Volume = Risk Amount / (Contract Size * Tick Value * Tick Risk * Volume Step)
Volume = 20 / (1 * 0.01 * 21 * 1) = 95 (rounded)

Gold Volume Example

Entry: 1332.25
Stop: 1323.33
Tick Size = 0.01 hence risking 892 ticks

Volume = Risk Amount / (Contract Size * Tick Value * Tick Risk * Volume Step)
= 20 / (100 * 1 * 892 * 0.01) = 0.02 (rounded).

Also note the “Minimal Volume” = 0.01 so I am good trading with a volume of 0.02.

Mind The Bid / Offer Spread

Please note that the above examples do not factor in the bid / offer spread which for the major markets is small hence is makes very little difference to my volume calculation. But where the bid / offer spread is significant, simply add it to the size of your stop (i.e. if you have a 20 pip stop and bid / offer spread is 10 pips, you are effectively risking 30 pips so your volume calculation should reflect this).