This indicator uses the information on the chart and your input variables to display the calculated lot size and the corresponding stop for long or short positions. It calculates the position size based on the volatility calculated by the ATR indicator and divides the account equity into two parts, each of which has its own risk percentage.
The concept of the “Market’s Money” indicator is to use a lower risk percentage for the base equity of the account and a higher risk percentage for funds above the base equity. This allows you to potentially increase the account faster, using a higher percentage for the profit received on the account, while maintaining a low percentage of risk on the initial capital. If there is a drawdown on your account and only the basic capital threshold is available, the indicator will only use the risk percentage specified for this part. Over time, when your account increases, you can change the amount specified as the base capital, thus protecting some of the money earned.
The indicator adds text directly to the chart, showing the necessary data, including the base capital, the main risk%, the additional capital, the additional risk%, the ATR range, the ATR value from the previous bar, the calculated position size, the part of the account exposed to risk when closing at a stop loss (excluding spreads, gaps or slippage), and stop levels for long or short positions.
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You can change the input parameters to change the base risk percentage, the base capital, the additional risk%, the number of bars for the ATR, and the ATR range. Input parameters:
- Base_Risk_Percent: the percentage of risk for the main part of the funds in the account. If you want to risk 1%, specify 1. If 1.75% should be at risk, write 1.75.
- Base_Equity: The main part of the funds that you want to separate from the rest of the funds in the account.
- Market_Risk_Percent: the percentage of risk for funds in excess of the account’s fixed assets. If 2% should be at risk, specify 2. If 2.5% should be at risk, write 2.5.
- ATR_Periods: the number of bars to calculate the ATR.
- Stop_Range_ATR: A multiplier to create an ATR range or stop level around the price. If this value is too small, you will have more false signals if the stop is too close. If too large a value is used, the stop level may be too far away, and the position size will be too small, and it will not be profitable.
The % Volatility Position Size parameter takes into account volatility, equalizes or normalizes positions regardless of the currency pair, and does not allow losses to increase due to the enabled stop levels. You will always know what the position size should be based on the selected risk sizes. The indicator is calculated for each tick on the chart and calculates the value when the price reaches the stop level. Based on this value, the position size is calculated, taking into account the desired risk sizes. When the volatility increases, the indicator shows a smaller position size. When the volatility increases, the indicator shows a larger position size. In addition, % Volatility Position Size will increase the position size as your account grows based on the risk settings, as well as reduce the position size if drawdowns occur on your account.
Calculation formula: (Part of the risk funds / ((ATR distance / Tick size) * Tick value))
The calculation is then rounded down according to the Lot Increment parameter.
- If the ATR value is too small (for example, on the M1 or M5 chart), the position size will be larger than you expect. In this case, you need to increase the value of the ATR Range.
- If you use any other indicator that uses the comment functions at the same time on the same chart, only one of them will work.