Setting the risk per trade
Risk per trade is the amount that leaves the account when one position goes against you, fixed as a percentage before the order goes in. On a 10,000 USD balance, one percent is 100 USD. Wherever the stop ends up, the lot is sized so that the stop costs 100 USD, which keeps the amount still and lets the position size move instead.
What the percentage does becomes visible during a losing run. Ten losses in a row leave 10,000 × 0.99^10, which is 9,044 USD, a drawdown of 9.6 percent. The same ten losses at five percent leave 5,987 USD and a drawdown of 40 percent. Identical trades in identical order, only the multiplier differs. The larger the percentage, the faster the account's margin for error erodes, and on a leveraged CFD account that erosion runs faster still, up to the loss of the whole deposit.
When weighing your own percentage, your own record says more than a rule of thumb: how often losing runs arrive and how long the longest one ran. In the client area the History tab of the Portfolio screen takes a period and exports the closed trades as CSV, which is enough to count those runs. Write the percentage down, and recalculate the day's cash figure before you open the order window, because it moves with the balance. As a start, work out one and two percent of your balance and keep both numbers within reach.
Working out position size
Position size comes out of one division: the amount you are risking divided by what the stop costs on a full lot. Take 100 USD of risk, a 25 pip stop on EURUSD and a pip value of 10 USD for one lot. The stop is worth 25 × 10 = 250 USD per lot, so the size is 100 / 250 = 0.40 lot. Check it the other way round: 0.40 × 25 × 10 = 100 USD.
Pip value is not 10 USD everywhere. It moves with the exchange rate when the quote currency differs from your account currency, gold contracts are defined in ounces, and index CFDs move in points rather than pips. The reliable source is the symbol itself: right-click it in the Market Watch window in MT5 and open Specification, where contract size, digits, minimum volume and volume step are listed. The Pip value tab on the site's Calculators page returns the value in the quote currency, so a different account currency needs a further conversion. The Position size tab adds balance, risk percentage and stop distance and returns the lot.
Rounding the answer up raises the risk: writing 0.50 where the sum says 0.47 adds roughly six percent, and the volume step limits what you may write anyway. Spread and commission sit outside the stop distance, so the real loss lands a little above the figure you calculated. Go back to your last trade, measure the stop, run the division, and compare the answer with the lot you used.
Placing the stop where volatility says
The stop distance is set by how far the instrument normally swings, not by how much you are willing to lose. If a symbol travels an average of 18 pips an hour, a stop 10 pips away is hit by ordinary noise before the idea has had time to be right or wrong. The common measure is ATR: in MT5 add it from the Insert menu under Indicators, Oscillators, Average True Range, and leave the period at 14. An ATR of 0.00180 on the hourly chart is 18 pips.
Setting the stop as a multiple of that reading makes the distance narrow in quiet markets and widen in fast ones. One and a half times 18 pips is 27 pips. The risk amount does not move, so the lot adjusts instead: 100 / (27 × 10) = 0.37 lot. A wider stop means fewer dollars per pip, and the two changes cancel each other out.
Two technical limits apply. The stop distance has to cover the spread, because a long position is closed on the bid side. Each symbol also carries a stops level in its specification; it may be zero, and where it is not, the server will not accept a stop closer to the price than that. ATR gives no direction, only distance, and reads differently on every timeframe, so the chart you manage the position on is the consistent one to read. Add ATR to three symbols you follow, note the daily and hourly readings, and set them beside the stop distances on your own recent trades.
Risk and reward, measured
Risk and reward are measured in the same unit: the stop distance is one R and the target is a multiple of it. A trade with a 30 pip stop and a 60 pip target is one to two, returning 2R when it works and costing 1R when it does not. R can be written in money as well; on a trade risking 100 USD, 2R is 200 USD.
The ratio's real job is to tell you the hit rate you need. The break-even hit rate is 1 / (1 + reward), so at one to two it is 1 / 3, or 33.3 percent. If eight of twenty trades work, the result is 8 × 2R minus 12 × 1R, which is plus 4R. The same twenty at one to one would give 8R minus 12R, which is minus 4R. A distant target is reached less often, so raising the ratio usually lowers the hit rate; the two numbers are read together. Spread, commission and swap come out of R too, so a 2R on paper does not arrive as 2R.
The practical way to measure the ratio you actually get is to divide each trade's net result by the risk amount you planned for it. In the CSV from the History tab of the Portfolio screen, the net column carries commission and swap; the planned risk lives in your own record, since the platform does not store it. Average the R values, and count trades you closed by hand before the target separately.
Take profit and partial closes
A take profit is a server-side order that closes the position while you are away from the screen. You type the level into the Take Profit field of the order window, which F9 opens in MT5, or add it later by right-clicking the position in the Trade tab of the Toolbox and choosing to modify it. Left blank, the position has only the stop and your own hand as exits.
A partial close realises part of the position and leaves the rest open. Double-click the position in the Trade tab, lower the volume in the window that opens, and press the close button. On a 0.60 lot EURUSD position sitting 30 pips in profit, closing 0.30 lot realises 0.30 × 30 × 10 = 90 USD, and the remaining 0.30 lot carries on at the same open price with half the margin held. The volume you type has to match the minimum volume and volume step in the specification.
Leaving in two pieces does not double the spread, since spread and commission both scale with volume, so the total stays similar. What changes is uncertainty: the exit price of the second piece is still unknown, it keeps accruing swap while it is open, and a per-deal minimum commission would make the split exit slightly dearer. A partial close shrinks the open risk and shrinks the remainder's upside by the same proportion. Each exit is a separate row in the History tab, so on a demo account you can close in two pieces and compare the sum with a single exit.
Using a trailing stop
A trailing stop is a terminal function that drags the stop level along behind the price as the position moves in your favour. In MT5 you right-click the position in the Trade tab of the Toolbox and pick the trailing distance from the menu that opens. That distance is in points, not pips: on a five-digit EURUSD quote, 200 points is 20 pips. On a long opened at 1.0850 with a 200 point trail, price reaching 1.0900 moves the stop to 1.0880, and it never steps back down.
The constraint worth knowing is that the function runs in the terminal, not on the server. Close the platform or lose the connection and the trailing stops, though the stop order already moved stays where it was placed. If you are shutting the computer down, dragging the stop to the level you want by hand is more predictable, because the stop order itself is the only part the server holds. The function belongs to the desktop terminal and has no counterpart in the mobile app.
The cost is being closed early by ordinary pullbacks. A 20 pip trail on a symbol that swings 60 pips a day can end the position on the first retracement, and reading the distance off the symbol's own volatility reduces that. A trailing stop guarantees no profit, it only ties the exit to a rule, and once the moved stop is triggered the slippage risk is the same as any stop. Confirm the symbol's digits in the specification, since that sets the multiplier between points and pips.
The combined risk of correlated positions
Correlated positions behave like one position. If you are long EURUSD and long GBPUSD at the same time, both trades stand against the dollar, and a broad dollar rally puts both under water together. If each risks one percent of the balance, a single release exposes close to two percent, not one. Long EURUSD alongside short USDCHF is in practice the same trade written twice, because those two symbols usually move in opposite directions.
The rough but workable way to see the total is to group open trades by their shared driver: the dollar side, the euro side, the ones that follow risk appetite, and pairings such as gold and AUD that often travel together. The Portfolio screen in the client area shows open volume by symbol, which is enough to add up the lots facing the same way. For a measured version, press Ctrl+U in MT5 to open the Symbols window, export the daily bars of two symbols, and compute the correlation of the last two hundred closes in a spreadsheet. A coefficient approaching 0.8 says the two symbols move largely together.
Correlation is not fixed; in hard weeks things that looked separate can move the same way, so the grouping is repeated while positions are open rather than only before. List your open trades on paper, note which currency each one is for and against, and count how often the same letters repeat.
Managing an account through a drawdown
Managing a drawdown starts with knowing its arithmetic. Losses are not symmetrical: an account down 10 percent needs 11.1 percent to get back, because 1 / 0.90 = 1.111. A 20 percent drawdown needs 25 percent, a drawdown of one third needs 50 percent, and a halved account needs 100 percent. Lose 70 percent and the way back asks for 233 percent. The reason is plain: the loss has to be earned back on the smaller capital that is left.
Put that together with risk per trade. Twenty losses in a row at one percent leave 0.99^20, which is 81.8 percent of the starting balance, and recovery asks for 22.3 percent. The same run at five percent leaves 35.8 percent and asks for 179 percent. The length of the losing run did not change, only the multiplier did. Leverage runs the arithmetic faster, because one oversized position can take a large share of the balance at once. The number has a behavioural side: a deep drawdown feeds itself once the urge to make the loss back quickly pushes lot sizes up.
To measure your own, look at the realised result curve in the History tab of the Portfolio screen. It plots the cumulative result of closed trades including commission and swap, and the distance from the highest point to the lowest one after it is your maximum drawdown. Adding the CSV net column row by row gives the same figure. Then work out the return it would take to recover, and set that beside the risk percentage you use.
Choosing leverage to fit the risk
Leverage decides how much margin a position ties up. It does not decide how much you can lose. One lot of EURUSD is a 100,000 EUR contract. At a rate of 1.10 and 1:100 leverage the margin is 100,000 × 1.10 / 100, or 1,100 USD. The same position at 1:500 ties up 220 USD. In both cases a pip is worth 10 USD and a 20 pip move against you costs 200 USD. Changing the leverage does not change that number.
What it changes is free margin, and the risk enters there: high leverage lets the same balance carry a far larger lot. Margin level is equity divided by margin: 5,000 USD of equity against 1,100 USD gives 5,000 / 1,100, or 454 percent. As that ratio falls you reach the warning level, then the stop out level at which the server closes positions. Stop out level and maximum leverage vary by account type and are both published on the Accounts page. The leverage set on your own account sits on the Leverage row of the account card in the client area, alongside margin, free margin and margin level.
The order does not start with leverage. Fix the risk amount and the stop distance, work out the lot, and only then look at what that lot costs in margin. Contract size differs on gold or an index CFD, so the margin differs too. Put lot, price, contract size and leverage into the site's Margin calculator and compare the answer with your free margin; the platform shows the exact figure.
Slippage and gaps around data releases
Two separate things happen around a data release. Your order fills at the price available rather than the one you wanted, which is slippage, and the price jumps between two quotes without trading in between, which is a gap. A stop becomes a market order the moment it is triggered, so your stop level is a trigger and not a guarantee. A stop at 1.0800 fills at 1.0785 if that is the first price after the release, and on one lot those 15 pips are an extra 150 USD of loss.
The timing is knowable in advance. The Calendar tab in the MT5 Toolbox lists release times and importance, and the same list sits on the Economic calendar page of the site, filtered by currency and importance. Rate decisions, employment and inflation prints usually draw the broadest reaction. The symbol's execution type also shapes the outcome and is shown in its specification. The deviation field in the order window caps the price difference you will accept, though an order can go unfilled once price moves outside that cap.
No setting removes slippage. What you can change is how much is exposed in that minute: carrying fewer lots, closing before the print, or placing no new orders inside that window. Gaps and slippage mean the loss can exceed the amount you planned, and on a leveraged account that difference grows quickly. Open this week's calendar, set the high-importance times beside your own trading hours, and mark where they overlap.
Holding overnight and over the weekend
When a position rolls over, swap is applied. It comes from the interest difference between the two currencies and is credited or debited when the server day changes. You find the rate by right-clicking the symbol in Market Watch and opening Specification, where the long and short sides are listed separately, along with the day that carries the triple charge, since the weekend rollover is booked in advance. Suppose the window shows minus 4.20 USD per lot per night: half a lot costs 2.10 USD a night, ten nights cost 21 USD, and none of it appears inside your stop calculation. The terms of the swap-free account option are listed on the Accounts page.
The weekend has a second face: stops do not work while the market is closed. If news between the Friday close and the Sunday evening open makes the price open beyond your stop, the position closes at the first available price and the loss is larger than planned. Session hours differ across index and commodity CFDs, so that gap does not fall in the same place for every symbol; the session information is in the specification too.
Swap already charged shows in the Swap column of the Portfolio screen, and for closed trades the realised result curve in the History tab includes swap and commission. On a long-held position swap builds up as a separate item outside the risk your stop measures. Look at the swap row on your open positions and work out how many pips the carrying cost equals.
Keeping a trading journal
A trading journal holds what the platform does not. MT5 already records what you bought and the prices you entered and left at; the report option in the Toolbox History tab takes that out as a file, and the History tab of the Portfolio screen gives the same data as CSV. What the journal adds is intent: why you entered, what set the stop where it sits, and at which moment you departed from the plan if you did.
These fields are enough for one row: ticket number, symbol, date and time, direction, lot, entry, stop, target, exit, the result in R, the name of the setup, and one sentence of reasoning. The ticket number ties the journal to the platform record, so anything you wrote can be checked later. Stop and target levels are not in the closed-trade export, so the journal is the only place they live. Measurement can start once a few dozen trades accumulate: fifteen winners at an average of plus 1.8R against twenty-five losers at minus 0.9R gives 15 × 1.8 minus 25 × 0.9, or plus 4.5R. Grouping the same table by setup name makes the rows that drag R down visible.
The cost of a journal is time, which is why most people abandon it. Keep the field count low and fill the row in right after the order goes in; a row left until the evening usually never gets written. Taking your last ten closed trades from the CSV and adding one sentence of reasoning to each is enough of a start.