How to work out trading size for 2 currency trades

ForexHero

Junior member
10 1
Hello, I'm trying to work out position sizes to take with spreadbetting if trading 2 different currency pairs that are highly correlated.

I think the maths is simple but I've been trying to figure it out for hours but not managed.

Say currency A is trading at 10,000 and currency B trading at 8000

I want to risk £20 on each trade if they move an equal number of points.

E.g if A moves 20 pips then for a £1/ pip bet I could lose £20 at the stop loss.

If B moves 20 points how much money per pip must I bet to risk the same monetary value relative to the size of A?

I've been trying ratios

10000 : 8000
1.25 : 1
1 : 0.8

Then I don't know what to do?

I don't know if my question make sense but what I'm trying to do is work out how to trade correlated currencies.
What I am trying to ask is how do I work out how much money to risk per pip if the currencies are correlated but of different sizes?

Please help
 
Last edited:

tomorton

Legendary member
7,440 1,003
I trade forex almost exclusively but I never hedge like this as its complicated, indirect, unreliable and expensive.
 

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