Forex Position Size Calculator in PINE SCRIPT V4 • AutoView With Oanda

Forex Position Size Calculator in PINE SCRIPT V4 • AutoView With Oanda

hey guys welcome back to another
pinescript mastery video
today's lesson i'm going to be covering
how i created
my position size calculator to use in my
auto trading script
that i use in the forex markets
all right so in this lesson i'm going to
show you how i created my
position size calculator script down
here
so if i open up the settings menu here
you can see i can input my account
balance my account currency the risk
per trade is a percentage of my account
balance that i want to risk
and my stop loss size in pips and then
this script will calculate
my position size which is this number
here in red
the number here in orange is the
exchange rate between
my account currency and the market that
i'm currently trading
so right now my account currency is set
to us dollars
and i'm on the us dollar versus the
swiss franc
and so the exchange rate that i'm seeing
here
is this current rate right now but
later in the video i'll show you
examples of using different account
currencies on different markets
and we'll break down how the script
works but before we do that i
should probably explain why i made the
script and how it actually works the
theory behind it
so i've been using auto view to
automatically
execute trades on my ultimate pullback
indicator script
which is this script here and
the problem i was having is that my
position
size was a fixed lot
size so no matter what currency pair i
was trading or how wide my stop loss was
the script was only executing trades
using a fixed unit size so let's say 10
000 units
and so no matter what if i had a uh you
know a 16 pip stop loss it was only 25
percent
risk of my account if i had a 30 pip
stop loss you know it was
more risk and my risk was inconsistent
my risk
per trade was inconsistent for the
strategy and that was a problem
because you know sometimes i'd win a
trade but it wouldn't make up for the
previous loss because the loss was
bigger than the risk that i risked on
the next trade
if that makes sense and because autoview
is a chrome extension
that basically just hooks into trading
views alerts
the trading view script is what sends
the position size the quantity to trade
to the autoview extension now the
problem is that autoview can't talk
back to the script so it can't tell our
script what our account balance is
and so if i want to risk say one percent
of my account per trade no matter what
size my stop-loss is
i can't do that through auto view
automatically
since my script can't see my account
balance uh
and so i came up with a kind of a hack
fix for this
but it's actually working perfectly for
my needs at the moment
and that hack fix was to develop a
position size calculator
that will calculate the position size to
risk based on whatever account balance
i put into this script no matter what
currency pair i'm trading
and what that exchange rate is between
my account balance
and the quote currency in this case
swiss franc
so let's quickly just go over some
theory relating
to position size calculations in forex
trading
so here i am over at babypips.com
and they have a good article here
explaining
uh the different nuances between
calculating your position size
based on certain parameters so
a good example of this is you want to
buy
euro pound and your account is
denominated in us
dollars this is where it gets tricky
because now if you're going to calculate
your risk
as a dollar amount or even a percentage
amount doesn't matter
you need to calculate that risk in us
dollars
while taking into consideration the
exchange rate between
the us dollar and the pound and the euro
and the pound now obviously if you're
trading a currency pair
using the same same currency as
the quoted pair so say you're trading us
dollar
against the swiss franc and your account
is denominated in us dollars
then the math behind calculating your
position size is a lot simpler
but the problem i was having is that a
lot of my currency pairs
in my portfolio do not contain my
account australian dollar denomination
and so i had to come up with
a clever way to calculate that risk
accurately
and so what my script is doing is it's
following this
step-by-step formula the first thing it
does is we tell it a percentage risk
amount that we want to risk and we tell
it our
account balance and then the script will
determine what that percentage value of
our account balance
is in the currency that our account is
in
so in my case if it's an australian
dollar and i want to risk one percent
of a thousand uh dollar australian
dollar account
then this number would be ten ten
dollars is one percent of a thousand
dollar australian
dollar account but then i need to
convert that risk
amount so in this case it's 50 us dollar
in my case
in my example it'll be 10 australian
dollars we need to
convert that risk amount into
british pounds so we convert our risk
amount
into pounds british pounds and then we
get our
risk amount in the quote currency then
the next thing we need to do is divide
that amount
by how many pips our stop stop-loss is
and that will give us our value
per pip so every pip
that this currency pair moves will be
worth
0.14 pounds in this particular example
and then we use that information to
calculate our position
size and so let me go over back to the
pine script editor and i'll show you
exactly how my script works
so let me hide the script for now since
we're not
focused on that we're focused on this
one down here the position size
calculator let me open
up the source code to it and the source
code will be below this video
if you want to follow along with me but
here it is
and so what we're doing here is first of
all we're getting our account
balance from the settings menu and pull
this down a little bit
from the settings menu so we're getting
our
account balance we're getting our
account currency
we're getting our risk per trade as a
percentage
and we're getting our stop loss size in
pips
as a whole number the next thing we need
to do is check
if our account currency is the same as
the base
or the quote currency which is used for
converting our risk amount
if needed so if the account currency is
the same as the counter currency
then this will return true so we're
checking our account currency variable
which is just a string variable
and here's the list of options to choose
from all the major pairs
if that account currency is the same as
whatever currency we have loaded onto
our chart
which is what siminfo.currency will give
us
as you can see here the currency for the
current symbol returns the currency code
usd
eur etc if our account currency is the
same as the
currency we have loaded onto our chart
at this first
currency sorry this currency here
is our counter currency so we're
checking is our account currency
the same as the counter currency and
then this boolean down here is checking
if our account
currency is the same as the base
currency which is this guy on the left
and then we use these booleans later
if we need to in order to convert our
risk once we determine these two
boolean values we can use them to
determine whether our account
is in neither of these so if i set my
account balance
to australian dollars then this would
return
true so if i do that now come up here
and set
this to aud that changes how
our position size is calculated but
moving on
uh the next couple of variables we're
getting here
is the currency conversion rates
so first we need to get what currency
pair
we are converting our risk amount into
if applicable so in this case i've set
my account balance to aud
so this block of code in here will be
getting executed
since my account currency requires
conversion in order to get the
appropriate
risk amount so we're checking first is
our account currency the same as the
counter currency
and if it is then we just want to set
our conversion currency pair to this
pair here the pair that we're currently
on
because the next thing we're going to
check is is our account
currency neither the counter currency or
the base currency
and if this is true then our conversion
currency pair is going to be set to
whatever we've set our account currency
two so in this case
it would be aud as a string plus
sim info dot currency which is
this guy here so if our account currency
is not in the
currency pair that we're trading then
our conversion currency pair
is going to be set to our account
currency
versus the counter currency value and
then we use that on the next line to get
the conversion rate the currency rate
between our account currency and the
counter currency i hope you're following
along sorry i know this
i'm saying the word currency a lot
starting to sound funny to me as well
it is a bit confusing but if you play
around with this code i'm sure it'll
make sense to you
and then finally if neither of these are
true
then it will just set the
conversion currency pair to the same
thing as this so
actually looking at this code i could
optimize this further
by removing this second
conditional statement here which i'll
show you what i mean right now
so because this conditional the second
conditional statement
no matter what this is will return the
same thing i can just remove this
conditional statement here
and save the script and it shouldn't
change anything
so there we go and so now we're just
checking is the account currency the
same
as our counter currency
if it is then we reference this
ticker that we're currently loaded on
otherwise
we combine our account currency in this
example aud
with the counter currency so we would
have aud
versus the swiss franc and that would
give us our current
currency conversion pair and therefore
the currency conversion rate so let me
set my account back to aud for this
example and let's
move on to the next line which is this
one here where we're
using the security function to
pass it our symbol which is our
conversion currency pair
which is determined by this line above
it that we just went over
we're using the daily resolution to get
that currency
value and we're just referencing the
close the closing price
of whatever our conversion currency pair
is
once we have this information we know
our account balance our account currency
we know whether or not it's included in
the
symbol we're trading and we have our
risk percentage and our stop loss size
in pips then we can use all of that
information to calculate
our position size which is what this
custom function
here does and so let me just run you
quickly through
this function here so i'm just creating
a new custom function called get
position size and it only has
one input parameter which is the stop
loss
size in points not pips but points
so if i'm using a 10 pip stop loss
as i do in this example then we need to
convert this number into
100 because 10 pips in a 4x
market is 100 points
and our stop loss is being calculated
using points in this function
so that's why when i'm drawing this data
i
convert our stop-loss size from pips to
points by just multiplying it
whatever value this is by 10.
but anyway the custom function here
first it determines our risk amount
so it multiplies our account balance
so in this example 1 000 australian
dollars
by our risk per trade as a percentage
so this little block of code here this
risk per trade divided by
100 is converting our one percent
whole risk into 0.01
because 0.01 is 1 in mathematical terms
but i have my risk per trade as a whole
number in the settings menu because it
makes more sense it's more intuitive
to users of the script so i could
change this to 0.01
and remove this divide by 100 bit of
code
but then it's a little bit less
intuitive for traders
who were using the script so that's why
i did that same with the stop-loss pips
we could have had just had this in
points
and just change that to 100 but again
it's counterintuitive because most
traders would operate
using pips and not points so anyway
moving on once we have our risk amount
in our account currency so in this case
one percent of 1000 aud is 10
aud then we're multiplying that
10 aud that this code here calculated
by our currency conversion rate
which we got up here
so if our account is the same as
the base currency or it's neither
currency
then it will time multiply our risk
amount
so in this case 10 aud by our conversion
rate
otherwise if our account currency
is the same as the counter currency
then it just multiplies it by one and
doesn't change
the risk amount because if we're
calculating our
account balance risk amount against the
same counter currency pair
as our account balance then we don't
need to perform any conversion at all
so i hope that makes sense we only need
to convert our risk amount
if our account currency is not in
the currency pair we're trading so next
up we calculate
our risk per point so we're multiplying
our stop loss
size in points by the point
symbol point value sim info.point value
will give us
the value of a point on this market
we're multiplying that by our stop loss
size and once we have all this
information
our risk amount and our risk per point
we can use that info to calculate our
position
size in units and to do that we just
divide our risk amount
which takes into account our conversion
if necessary
or if applicable and then we're dividing
that by our risk
per point and then dividing whatever
that is
by this symbol info sim info dot minimum
tick value and that will give us our
position size
in whole numbers and then finally
we just output remember the last line of
code in a custom function
is the output expression and in this
case we're just
outputting the position size
value we just calculated but we're
rounding it before we return it because
we don't want any decimal places after
it
since you can't trade a fraction of a
unit
at least not through oanda which is the
only forex broker that autoview works
with
at the moment and then finally once
we're done there we're just drawing
that data to the chart very simple
that's the
simplest part of this entire script and
all we're doing is we're plotting
our position size using the the get
position size function that we just went
over
we're passing it our stop loss size from
pips to points which simply multiplies
our stop loss size from here in the
settings
by 10 to get our stop loss in points
and then just for debug purposes when i
was working on the script i also
wanted to plot our conversion currency
rate
so let me go over this in practical
terms right now so it makes a little
more sense
so in this particular example we are on
us
swiss so us dollar against the swiss
franc
my account balance is in aud australian
dollars
and i have a thousand dollars in there
and
down here what we're getting is our
position
position size and i'm gonna come back up
here and change this back to one percent
because it should be more than 66 units
there we go
66 000 units so
by hovering my mouse here on this
current candle you can see that
this orange number remember our account
balance is in australian dollars which
is not in the
market currency pair that we're trading
and so we need to convert our risk
amount
into uh the quote currency i mean
the account currency in this case swiss
franc and so this orange number down
here
is showing the conversion rate between
aud
and swiss franc so it says here six five
six six nine
if we go over to aud swiss franc
and i load that onto my charts you can
see here 65688
that's the conversion rate let's go back
to us dollar swiss franc
and let's open up the trade window and
uh confirm that our position size is
correct
so we want a 10 pip stop loss
we want to risk one percent of our
account which is 10
australian dollars we need to convert
that risk into swiss
franc and let's confirm that this is
working
so over here i'll set a
buy order for a 10 pip
stop loss and i want to risk one percent
of my account
and my account balance on this account
is 9832.84
so if i come up here and i change this
to 9832.84
click ok now you can see that
our units that tradingview is telling us
to trade
in order to get 1 of our account
balance is very very close
to what our script is calculating so i'm
not sure why it's not 100 accurate
but we're only what's that 17 points off
17 units
off this value so that's close enough
for me
and so the script is working and
just to prove it let me change my
account to an account in us dollars
now so this account is 9975.01
usd so let's type that into here 9975.01
change this to usd click ok
now open up a new order 10 pip stop loss
1
risk that gives us 91
788 units and that's
pretty close to what our script is
calculating 991
779 units so this one's only about 10
units off
very very very close very accurate it's
as accurate as we're going to get with
this script
so our position size calculator is
working the script
is working that's great so now let me
show you
how i use this in practice in a
practical manner
so let me open up the source code to the
script first of all let me open up the
settings
notice that at the top of this script
settings
i've added in exactly the same
script parameters as this position size
calculate calculator
the only difference is it doesn't have a
stop loss
input because the script itself
calculates
my stop loss so we're using our get
position size function
we're converting our trade stock
distance in pips
into a whole number because this
function was designed
to accept trade stop distance in pips as
a whole number
and then we're timesing that trade stop
distance as a whole number
by 10 in order to convert our trade stop
distance from pips
into points because remember the get
position size function
calculates our position size based on
points not pips
once we have this information all the
way down here
i draw that data using a
the plot function on my actual chart
this final line of code here
under this comment is plotting my
position size onto the chart
now it's turned off by default so i need
to come up into the settings menu go to
style scroll down
here we have position size if i turn
that
on and i hover over a trade
you can see our position size in purple
they're
being plotted onto the actual chart so
in this particular setup
given the settings that i've put in here
so our account balance is
in us dollars and we have a thousand
dollars in there we want to risk one
percent per trade
based on that information our position
size
for this particular setup is 2671
units and the way i would pass this
to my trading bot my auto view extension
is using alerts so i would set upi
as my alert once per bar close now
whenever
a setup is detected so for example let's
say i want to set
long alerts for auto view to trigger
i would paste in my command here into
the alert message box
and so this command here would tell
orderview to target the awanda
exchange the real money one there's no
oh this is not owen of practice this is
real money oander account so e equals
oend
next up b equals long so our position
direction is long we want to buy this
market
next up we have q which stands for
quantity
so our position size and notice that i'm
passing into q
our plot so plot number 14
is our position size
variable up here or value our position
size value this purple
position size here is our plot number
14.
so now autoview knows to risk one
percent of my account
i need to change this to the currency
that we're actually trading so usd
slash chf we're using a market order
we're passing our fixed stop loss value
which is plot number nine
and our take profit size in pips which
is plot number 13.
so now if i were to execute this trade
and let's i mean alert
and let's say that i've turned off short
trades in the script so it's only
detecting long signals
and whenever a long signal is detected
my order view command alert is triggered
then it's going to be passing my
position size
to autoview using this plot here
and that's the closest i can get to
getting auto view
to risk a certain percentage amount of
my account
per trade the obviously the only
drawback with this
is that i need to change my account
balance
semi-frequently in order to keep this
calculation accurate
so for example if i'm risking one
percent per trade and i lose
let's say five trades in a row maybe 10
somewhere between that or my account
is in drawdown by let's say ten percent
so i'm down a hundred dollars and my
account balance is now 900
instead of a thousand then i would need
to remove all my alerts
and reset them with an updated position
size so
change this to whatever my account
balance
has changed to and reset all my alerts
and
at the moment i've been running this
script for a couple of weeks now
and it's fluctuated from profit to
drawdown a couple of times
and i've only really had to change my
account balance
in my script uh once every weekend and
i'm trading the 15 minute chart so i'm
getting quite a few trades
but unless we hit a really nasty losing
streak and my account
drops 10 in a week um i don't really
need to adjust
my account balance value
very often maybe i just at the moment
i'm just doing it on weekends
so it's very low maintenance and it's
the closest thing we can get
to a really simple forex trading
algorithm
if you were to try to do this sort of
thing in any other language it would be
very
very complicated but thanks to auto view
you only need to write your script
once make sure your script is
calculating your stop loss size and your
take profit size
once you have that information so long
as you're calculating your position size
using this script that i've just
covered today and the source code is
below this video you can copy and paste
it into your own scripts
just remember you need to convert your
stop loss size to whole numbers
and then multiply it by 10 in order to
get
your stop loss in points so that's it
for this lesson
i hope you found that helpful if you did
and you want to learn more about pine
scripts
head over to panscriptmastery.com here
you'll find my
advanced panscript courses and my basics
course which is free
so if you want to learn more about
panscript head over here and you'll find
out a little bit more about me
and a little bit more about pine script
i hope you found this lesson interesting
and helpful
i'll see in the next one
[Music]
you