After all the enabled screeners get triggered, then the next step is to calculate the number of lots to buy or sell. For this, various parameters must be configured. You start by specifying the percentage of your current balance you want to risk in each trade. You can also have the maximum of percentage of your account’s balance you want to risk at any given time.
You will need also to specify the Stop Loss strategy so the risk can be calculated.
- max_risk_per_trade – Each trade open by the system will be sized so that the maximum loss is no more that the specified. Number from 0.0 to 1.0
- max_risk_account – The system will not risk more than the specified percentage of the account balance at any given moment.
The various components of risk management:
- Position Sizing
- Entry and stop loss price strategy
- Break Even Strategy
- Expiration or cancellation of pending trades
- Trailing Stop Loss
- Time Stop Loss