What is the Position Sizer Expert for MT5?

What is the Position Sizer Expert for MT5?

Reading time: 6 minutes

Anyone who has traded either a live or demo account will have quickly understood the significance of position sizing. The consequences of not taking this side of the business seriously (risk management) often culminate in unnecessary losses or even account ruin.  

Regardless of the trading system used, its win rate, or risk-reward ratio, if the size of the position is incorrect, this signifies that your trading account is exposed to too much risk or not enough. Both will make achieving success in the financial markets challenging. 

Although some prefer calculating their trade size manually or using the FP Markets Trading Calculator, there is another way: a Position Sizer designed specifically for MetaTrader users. 

Installing the MetaTrader 5 (MT5) Position Size Calculator

Unfortunately, MT5 (and MT4) does not have a pre-built Position Sizer. However, it is available through an Expert Advisor (EA), which you must download and install. This process is straightforward and should not take more than a couple of minutes, as demonstrated below: 

1. Download the EA. Plenty of Position Sizer EAs are available freely online and can be found through a quick Google Search. The one used here is from Earn Forex.

2. Once downloaded to your system, open your MT5 Platform, click on ‘File’, choose ‘Open Data Folder’, and then select the ‘MQL5’ Folder (below).

3. Click on ‘Experts’.

4. Copy and paste the Position Sizer EA from your Downloads into the Experts folder for MQL5, as shown below.

5. Then head back to the MT5 Platform Menu; select ‘Tools’ and choose ‘MetaQuotes Language Editor’. From this point, you must click on your Position Sizer and right-click ‘Position sizer.mq5’. Select ‘Compile’, and MT5 will start compiling the EA. This may take a few minutes to complete. 

6. Once finished, you will see that the code has been generated, as illustrated below.

7. You can then double-click on the Position Sizer Indicator from the ‘Navigator’ Window in your MT5 Platform and begin using the EA across your traded financial instruments (below).

How to Use the Position Sizer EA?

The Main features of the Position Sizer EA are as follows:

• Entry value.
• Stop value.
• Take-profit value.
• Order type.
• Commission value.
• Account balance.
• Risk percentage.

From the EUR/USD daily chart below, Trader A is about to enter a long (buy) position at $1.0785 with a protective stop-loss order below price at $1.0700 (a stop distance of 85 pips). On this occasion, Trader A is a trend follower and trails his positions (hence no take-profit target is set at entry) and we will ignore commissions here. 

You will note that the Trader has a substantial account size of 100,000 AUD and, for this trade, is risking 1% (1,000 AUD). After inputting the direction of the trade (either long or short [sell]), the entry and exit values, and the order type (in this case, the Trader wanted instant market execution, so they left it ‘Instant’), the Position Sizer provides a real-time accurate trade volume that can be directly inputted into MT5. For this trade, to keep within the Trader’s risk tolerance of 1,000 AUD, the position size was 0.77 (lot size: seven mini lots and seven micro lots). Another great thing about this EA is it updates in real time. If price changes while you are inputting data, the position size will adjust accordingly.

As an additional note, you can see that the EA plots the entry and risk levels on the charts, visually exhibiting entry and risk levels for you before the trade is executed. 

The EA works with all major financial assets. Here is an example of Trader A looking to trade gold (XAU/USD), but this time elects to set two take-profit objectives. 

Closing Thoughts

While it is always recommended that you learn to calculate the position size manually for your trading, using either the Position Sizer EA for MT5 or the FP Markets Online Calculator can be very effective. 

This article has demonstrated how to install the Position Sizer EA and how to begin calculating your position sizes directly from the MT5 platform. Nevertheless, you are encouraged to continue exploring the EA as it offers added aspects to help understand risk. In addition to the Position Sizer (found under the tab ‘Main’), the ‘Risk’ tab helps determine the risk and reward for your portfolio, and the ‘Margin’ tab helps calculate a trading position’s margin (initial margin and free margin, for example), the Swaps tab helps determine the swaps for the positions traded, and a dedicated Trading tab is designed for trading directly from the EA’s interface based on the entered data.