54 lines
1.4 KiB
Markdown
54 lines
1.4 KiB
Markdown
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# ATR-Based Dynamic Position Sizing (with SmartMA MT5)
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**Concept:**
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Size every trade according to current market volatility—using SmartATR—so you risk the same amount per trade, no matter how choppy or quiet the market.
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---
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## Setup
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- **Timeframe:** Any (works for swing and daytrading)
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- **Asset:** Any
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- **Indicator:** SmartMA MT5 (using risk band/ATR output)
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---
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## How to Calculate Position Size
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1. **Calculate ATR:**
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- Use SmartMA’s risk band (ATR value on current bar)
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2. **Define Risk per Trade:**
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- E.g., risk 1% of account balance per trade
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3. **Compute Position Size:**
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- Position Size = (Account Risk per Trade) / (ATR-based stop distance)
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- Example: ATR = 30 pips, willing to risk $100 → $100 / 30 = $3.33 per pip
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4. **Adjust Trade:**
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- Set stop loss at (Entry ± SmartATR)
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- Trade only if minimum lot size is possible and within broker/margin limits
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---
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## Example Pseudocode
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AccountRisk = 1% of balance
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StopDistance = SmartATR (on entry bar)
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PositionSize = AccountRisk / StopDistance
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---
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## Why This Works
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- Makes your risk consistent, regardless of market conditions
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- Automatically trades smaller in volatile times, larger in calm times
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- No more “random” stop distances
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---
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**Tip:**
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Combine with SmartMA’s session/news overlays—avoid position sizing on news or “frozen” bars!
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---
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*SmartMA MT5 – For risk managers and traders who want true consistency!*
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