The reason why lot size determines profit and loss

Display of the Metatrader trading platform on Android
Display of the Metatrader trading platform on Android
Hello everyone, how are you? On this beautiful occasion, I could write this blog with a post the story of personal experience inspired that.

In this post, I will only tell a short story. Actually, the idea appeared to make a post this time entitled Reason trading with small lots can profit but when large lots often Loss? (The reason lot size determines profit and loss) because I feel that and have experience with it.

Well, coincidentally some time ago I was trading using lust and greed. I use a lot with a portion of 5 times the lot that I usually use when opening a position.

Now, with the size of the Lot 5 times, I made it in several open positions and used a duration that was not too long (sometimes scalping and sometimes intraday with SL distance not too far from the OP).

Because using the elephant lot, then I did not dare to hold the position for long. The point is, I sometimes use scalping and also sometimes hold up to several minutes (often less than an hour).

Because using a large lot, the risk and reward will increase, where if the profit will be 5x greater, likewise if the loss will get a greater loss.

I trade by violating the rules of the trading plan that I have planned, which usually risks 2% -5% of the capital (balance), then at that trade I risk 10% -25% of the capital.

This means with money management like that, then it's a bad thing if it comes to lose, but if profit is a very profitable thing.


But what happened? And it turns out that many of my positions affected by SL and experience a barrage of loss.

I then wonder, why when I trade using a small lot can profit, but when I use a large lot, I don't know why I often lose.

Events like this actually I did not experience just once, but on several previous events I also often experience it, even to this day when writing this post.


Well, because I feel very frustrated, then I tried several times to open positions with elephant lots (large lots) and finally what happened was not profit but loss.

Even the loss that I suffered to eliminate the profit I got and to dredge my initial balance (which finally after several violations of trading rules exposed to MC again). :(

After that incident, I then came up with the idea to write this post and it still amazed me when I wrote this post that somehow the incident happened and I am sorry about the trading incident that I did.


Which is not surprising, each using a small lot can profit but turn to use a large lot even lose?

Actually, this incident is not the first time for me but it has been several times, but until now still often determined to use a large lot. And unfortunately, it's more often loss.

As of writing this post, to be honest, I am still mentally disturbed and somewhat shocked to see the red color of the trading platform :(

After I experience loss several times when using large lots, then I have conclusions about why when trading with small lots can profit but when large lots often loss? or  The reason lot size determines profit and loss. It is because of several things, namely: Psychologically disturbed, Trading becomes uneasy and  Analysis that carelessly 'inconsequential'

  • Psychologically disturbed

This is the main thing where when I use a big lot, my psychological condition is very uneasy. It is very stressful where when after Open Position, my heart feels palpitating and my eyes cannot escape from looking at the chart.

Well, based on several times trading with large lots, to be honest, my psychological disturbed and become uneasy in decide

  • Trading becomes uneasy

Trading becomes uneasy, this is a condition when psychologically disrupted where when using large lots then also dared to risk large losses.

Who can calm down if we get a big loss or even hit by a margin call?

Now, because trading is not calm, I make mistakes in decision making after opening a position.

  • Analysis that carelessly 'inconsequential'

Now, after the psychological disturbance and trading became uneasy, the analysis that I applied became 'inconsequential'.

Why can I conclude inconsequentially? Yes, because I made several hasty decisions when using large lots, some of them are:

  1. Wrong decision because I look at the chart continuously, then before touching Stop Loss based on the analysis that I do I often do a Cut Loss, where after I CL, unfortunately, the price often moves to the price under the analysis at the beginning.
  2. Vice versa, because of the incident on no.1, then dare to hold the floating and watch the price when it hits SL, and unfortunately again when the SL hit price turns out the price also moves according to the initial plan and even can get to the TP.
  3. Now, because of events number 1 and number 2 I then dared to withstand large floating, where when my psychological condition interrupted I was very fickle because I changed SL several times, and without conscious floating minus a lot and then I surrender and wait between the price to turn around or a big loss or even to the MC :(
Well, because of those conditions, I made the wrong decision.
Need calm and a good psychological condition when trading
Need calm and a good psychological condition when trading
Based on the experience above, I concluded that money management and psychological or mental conditions are the most important thing in forex trading.

It beats various kinds of analysis such as technical, fundamental, or sentiment / inter-market. Honestly, if I make the right decision, the loss I get can turn into real profit.

Why do I say that the loss can profit? Because it concerns money management, if for example when I do a small lot of resistance my pips can withstand floating turn when I use a large lot that my pips resistance decreases.

This is my mistake, I then realized that trading must have good money-management and may not violate the trading plan that made.

"Looking at profits in trading is not just looking at the number of dollars earned, but we also have to look at the number of pips we get to profit".

For example, trader A and B is getting a profit of 1,000 USD together, if Person A GET a profit of 1,000 USD from 10 pips, while Person B gets a profit of 1,000 USD from 100 pips, you will choose type trader A or B?

0 Response to "The reason why lot size determines profit and loss"

Post a Comment

Iklan Atas Artikel

Iklan Tengah Artikel 1

Iklan Tengah Artikel 2

Iklan Bawah Artikel