I want to make a trade for the trading pair XAGUSD. My entry order is at $21.75 and my stop loss is at $22.20. What is the correct position size to realize max. $200 loss at stop loss.
user
To calculate the correct position size to realize a maximum loss of $200 at your stop loss, you need to use the following formula:

Position size = $200 / (entry price - stop loss price)

Plugging in the numbers, we get:

Position size = $200 / ($21.75 - $22.20) = $200 / (-0.45) = -444.44 ounces of XAGUSD

Note that the negative sign indicates that you are shorting the XAGUSD trade. This means that you expect the price of XAGUSD to decrease, and will make a profit if the price decreases and reaches your stop loss.
assistant
Is shorting a trade a good idea?
user