Calculating lot sizes

#1
The explanation on the manuals are very good, but it didn't explain how to calculate lot sizes when using 3 pairs. Perhaps a noob question, ive searched on forums but can't find it either.

for example

Buy `0.1 EURUSD
SELL 0.1 EURZAR
BUY ?? USDZAR

How would we calculate the lot size for USDZAR?

Thanks

Re: Calculating lot sizes

#2
only20gp wrote:
Wed Nov 13, 2019 9:27 pm
The explanation on the manuals are very good, but it didn't explain how to calculate lot sizes when using 3 pairs. Perhaps a noob question, ive searched on forums but can't find it either.

for example

Buy `0.1 EURUSD
SELL 0.1 EURZAR
BUY ?? USDZAR

How would we calculate the lot size for USDZAR?

Thanks
Very nice, you already came up with your own portfolio idea.

To get the lot size right you have to know the contract size and margin currency. This information is displayed on slave ea and is also available in the contract specification. Please note that the contract specifications can be different from broker to broker. However, generally it is so that the first currency is the margin currency.
lotsize_swapmaster.png
lotsize_swapmaster.png (12.13 KiB) Viewed 3128 times
Examples:
EURUSD - Margin currency is EUR
EURZAR - Margin currency is EUR
USDZAR - Margin currency is USD

Assuming that all three instruments have a contract size of 100 000 you have the following lot sizes.
Buy 0.10 EURUSD
Sell 0.10 EURZAR
Buy 0.11 USDZAR (10 000 EUR * 1.10088 = 11 008.8 USD) 11 008.8 USD are 0.110088 Lots

Alexander :D

Re: Calculating lot sizes

#4
only20gp wrote:
Thu Nov 14, 2019 2:38 pm
looks easy but still a little difficult

can you help me with one more example.

Short USD/MXN 0.1 lots
Long USD/JPY 0.1 lots

how do I figure out the if I buy or sell MXN/JPY and at how many lots?
sorry, just one more example please
You will see. After a little while it becomes easy but you are right, at the beginning it can be a bit tricky. At the beginning i constructed all portfolios on paper and added some notes to it. That makes
To your example:

Short USD/MXN 0.1 lots (you sell USD and buy MXN)
Long USD/JPY 0.1 lots (you buy USD and sell JPY)
Short MXN/JPY 1.94 lots (you sell MXN and buy JPY)

Please note that the 1.94 lots are only correct if the base currency is 100 000 MXN.

A word of advice:
MXNJPY is a very exotic instrument and you will have high execution costs and you can only trade it on a few brokers. I would recommend that you start with some simple portfolio (like the portfolio mentioned in the manual) and then build from there.

I hope this helps.
Alexander

Re: Calculating lot sizes

#6
Olivier wrote:
Sat Nov 23, 2019 9:58 am
could you add in SM-Master an automatic calculator of the last pair lot size based on the size of the other two and on spot rate of various terminals where these trades would be opened?
I thought about that and I agree, it would make things easier. Most of the time, this is.

The problem is that brokers sometimes use different lot sizes and base currencies. Now, when you have three brokers and all use different sizes, base and margin currencies it gets very quickly very complicated. While it does not make it impossible to code such feature it makes it certainly tricky. I think the advantage of doing the calculations by hand, head or excel is that it leads to a deep understanding what you hold and how the dynamics works.

Anyway. When we will have an idea for a mistake free calculation method we may add such feature.

Re: Calculating lot sizes

#7
Hi Alexander, I have constructed an excel table to compute lot size for 3rd pair. Seek your help on the formula to make it's correct. However, unable to upload the excel. Kept having error "Invalid file extension: Lot Size Computation Excel.xls". Is excel not a file type that an be uploaded?

Endgame

Re: Calculating lot sizes

#8
Endgame wrote:
Sun Nov 24, 2019 12:47 pm
Hi Alexander, I have constructed an excel table to compute lot size for 3rd pair. Seek your help on the formula to make it's correct. However, unable to upload the excel. Kept having error "Invalid file extension: Lot Size Computation Excel.xls". Is excel not a file type that an be uploaded?

Endgame
Hello Endgame.
I think the excel sheet you made can be very useful for users.

Invalid file extension.....mmm...I think xls attachments are not allowed by the forum engine. If you have a minute, you can send me a short E-Mail with the xls. I will then upload it to our server and put a link to the post.

Alexander
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