Step 4: Money Management

In step 4 you set how your plan manages your deposit and how to compute volume for every position.

First of all, ESB needs to know what is the base of its calculations. This can be determined by the “Base of Management” parameter. If you select “Automatic” the ESB chooses the lowest amount as the base of its calculations because of safety and lowering risk. For example, if the total of current positions is in loss, uses equity and if we are in profit, it uses balance for money management and calculation of volume!

There are three modes for the calculation of volume:

Fixed Volume: A fixed lottage for all positions that can be set by the “Fixed Lottage” parameter.

Compound: A percentage is set by the “Risk” parameter. The volume of position is adjusted so that if the stop is reached your account drawdown will be about this percentage. Suppose you set balance as the base of calculations and your account balance is 10000$ and Stoploss of position is 10pips. If you set risk on 2% (200$) the volume is set to 0.02 lot. Therefore, if Stoploss reaches, balance is reduced by 2%. Note that if a position doesn’t have Stoploss, the volume is calculated by a percentage of the base balance. 

Compound by balance: The volume of position is adjusted by a percentage of account (balance, equity or free margin) that is set by the “Risk” parameter.

By Expression: ESB calculates the “Lottage Expression” and uses it as the lottage of order. If the result of the calculations is zero it uses Compound Lottage and if it is also zero, then ESB uses Fixed Lottage as the volume of trade.