The EA settings that matter most are the ones that decide how much money is at stake: how the lot size is calculated, how much of the account is at risk, and how deep a drawdown you are prepared to carry. These decide the size of every result, good or bad. They can't make a strategy better, and no value is right for every robot and every account.
This article is about concepts, not about a specific robot. Names and options differ between EAs, and not every EA has all of them, so we don't quote parameter names here. Check the manual for what your EA offers. We cover the three ways of setting the lot, what the risk percent does and doesn't control, how to read a drawdown figure, how to size an EA from your own limit, and which settings to leave alone. New to this? Start with the lot size section. If you have run EAs before, the drawdown math is the part to read.
Why a Few Settings Matter More Than the Rest
Think of an EA's settings in two groups:
| Group | What it decides | Who should touch it |
|---|---|---|
| Size | How much is at stake on each trade | You: it depends on your account and limits |
| Strategy | When the EA enters and exits | Usually nobody: leave the developer's values or presets |
The reason is simple. A live record was made with particular settings. Change the size and the results scale. Change the strategy settings and you are running a different system, and that record no longer describes it. Tuning those settings until a backtest looks better is also how overfitting starts.
Three Ways to Set the Lot
Most EAs use one or more of these approaches. The examples use EUR/USD on a USD account, where 0.10 lot is worth $1 per pip.
| Method | How it works | Weak spot |
|---|---|---|
| Fixed lot | The same lot on every trade | The risk changes with the balance and the stop |
| Lot per balance | The lot grows with the account, for example 0.05 lot per $1,000 | The risk still changes with the stop |
| Risk percent | The lot is calculated from the balance and the stop distance | It needs a known stop on every trade |
Fixed lot
It is easy to understand, and easy to compare with a backtest. But the same trade means something different as the account moves. A loss of $20 (0.10 lot, 20-pip stop) is 1% of $2,000, 2% of $1,000 and 0.5% of $4,000. In a drawdown, a fixed lot quietly takes a bigger share of what is left.
Lot per balance
The size follows the account up and down, but it doesn't look at the stop. At 0.10 lot, a 10-pip stop risks $10 and a 40-pip stop risks $40. If the distance between entry and stop changes a lot from trade to trade, so does your risk.
Risk percent
Here the EA works backwards from the loss you accept, using the same formula as in Money Management in Forex:
Lot size = risk in money ÷ (stop loss in pips × pip value of 1 lot)
| Stop loss on EUR/USD | Lot for 1% of $2,000 | Loss if the stop is hit |
|---|---|---|
| 10 pips | 0.20 lot | $20 |
| 20 pips | 0.10 lot | $20 |
| 40 pips | 0.05 lot | $20 |
This method keeps the planned loss steady, but only if the EA has a stop for the formula to use. A system that adds to losing trades, like a grid or averaging EA, has no single stop distance, and a percentage per trade doesn't describe its risk. For these, the manual and the drawdown of a live account tell you more.
What the Risk Percent Doesn't Control
- Several trades at once. Three open trades at 1% each are 3% at risk, and if they are correlated they can all hit their stops together. See How to Run Several Forex EAs.
- The minimum lot. On a $500 account, 1% is $5. With an 80-pip stop the formula gives $5 ÷ (80 × $10) = 0.00625 lot, below the usual minimum of 0.01. At 0.01 lot the real risk is $8, or 1.6% (our calculation). Check what your EA does in this case: it may refuse the trade or open more than you planned.
- Gaps and slippage. A stop isn't guaranteed. In a fast market or over a weekend it can fill at a worse price, so a loss can be bigger than the percent you set.
- Costs. Spread, commission and swap come on top of the distance to the stop.
For a size you can check by hand, use the lot size calculator.
How Risk per Trade Becomes Drawdown
Size drives drawdown, and the link isn't quite straight. Here are ten losses in a row on $2,000, from our money management article:
| Risk per trade | Drawdown after 10 losses | Gain needed to recover |
|---|---|---|
| 1% | −9.6% | +10.6% |
| 2% | −18.3% | +22.4% |
| 5% | −40.1% | +67.0% |
Risk of 5% is five times 1%, and the drawdown is about 4.2 times deeper, because a percentage of the balance cuts the trade after each loss. The fixed version is harsher: $100 on every trade (5% of the starting $2,000) loses 50% after the same ten trades. On a fixed lot, drawdown in money scales in direct proportion to the lot. And the recovery is steeper than the fall in every row.
Read a Drawdown Figure With Its Size
A percentage on a live account depends on how much money stood behind the lots. The same loss in money reads very differently (invented figures):
| Deposit | Drawdown in money | Drawdown in % |
|---|---|---|
| $10,000 | $3,000 | 30% |
| $20,000 | $3,000 | 15% |
| $30,000 | $3,000 | 10% |
So before comparing robots, ask what lot was traded on what balance. Compare drawdown in money per 0.01 lot where you can. If the lot grew with the account, read the percentage from the periods when the size and the balance match your plan.
Size an EA From Your Own Drawdown Limit
Start from what you can accept, not from the lot in an example. A worked example, with invented figures that don't describe any real robot:
- A live account traded 0.20 lot, and its worst drawdown was $3,000. That is $150 per 0.01 lot.
- Your account is $5,000, and your limit is 15%, or $750.
- At the past drawdown: $750 ÷ $150 = 5, so 0.05 lot would use the whole limit.
- With a cushion for a deeper drawdown, say 1.5 times the past one: $750 ÷ ($150 × 1.5) = 3.3, rounded down to 0.03 lot.
- At 0.03 lot, the past drawdown would be $450 (9%), and 1.5 times that would be $675 (13.5%).
The 1.5 is only an example, not a standard. A short record deserves a bigger cushion, because it has seen fewer bad periods. This math fits a fixed lot best. It doesn't hold for a system that adds trades as the price moves against it, where the drawdown can grow faster than the lot.
Decide when you would stop
Write down your limit before you start, and what you will do when it is reached: cut the size, pause the EA or remove it. A live record's worst drawdown can be exceeded at any time. A rule made in advance is easier to follow than one made during a losing run. In the middle of a drawdown, don't raise the size to win it back.
Leverage Doesn't Set the Risk, but It Sets the Margin
Leverage doesn't change what a pip is worth. 0.10 lot of EUR/USD is $1 per pip at any leverage. What changes is the margin held for it, at a price of 1.085:
| Leverage | Margin for 0.10 lot of EUR/USD |
|---|---|
| 1:30 | $361.67 |
| 1:100 | $108.50 |
| 1:500 | $21.70 |
This matters when an EA holds several trades or adds to a position. If free margin runs out, the broker's stop-out closes trades at a level the EA didn't choose. Check your broker's stop-out level, and see that the account can carry the largest number of trades the EA may hold. More in What Is Leverage in Forex?
Settings to Check, Not to Tune
Many EAs have some version of the settings below. Don't optimise them, but make sure they match your setup:
- Pair and timeframe. Attach the EA to the chart it was built for. An EA isn't automatically suited to another symbol.
- Broker specifics. Symbol names, server time and spread can differ from the developer's setup, and some EAs need adjusting for them.
- Spread limit. If the EA has one, a value that is too tight for your broker can stop it from trading at all.
- Trading hours and news pauses. If the EA has them, they are part of how the system was built and tested, so check before you change them.
- Maximum open trades. It decides how much risk can pile up at once.
- Stop loss. Know whether the EA places a stop on every trade and how far away. If it doesn't, the risk percent section above doesn't apply.
Use the presets from the developer if there are any. After you change anything, test it on a demo account first. A demo shows whether the EA runs as you expect, but it doesn't prove future results.
A Checklist Before Going Live
- Read the manual: how does this EA set the lot?
- Find out whether it uses a stop on every trade, and how many trades it can hold at once.
- Write down your drawdown limit in money.
- Work out the size from your limit, and round down.
- Check the margin and your broker's stop-out level.
- Leave the strategy settings at the developer's values.
- Decide what you will do when the limit is reached.
On each robot's page in our catalog of forex robots you can see its live accounts and drawdown, which is where this math starts.
FAQ
Is a fixed lot or risk percent better for an EA?
It depends on the EA. Risk percent keeps the planned loss steady, but it needs a known stop on every trade. A fixed lot is simpler and easy to compare with a backtest, but its risk grows as a share of the account during a drawdown. Some EAs offer only one of these.
What risk percent should I set?
No single value suits every EA. In manual trading, many traders risk 1–2% per trade and beginners often start at 1% or less, but an EA that holds several trades at once needs more care. Work from the total drawdown you can accept, not from the figure for one trade.
Can I lower the lot size to reduce drawdown?
Usually yes. On a fixed lot, half the lot means about half the drawdown in money, and half the profit too. Don't go below the broker's minimum lot, and remember that a system that adds to losing trades may not scale in a straight line.
Should I change an EA's entry settings?
Usually not. The live record was made with the developer's settings, and changing them means running a different system with no record of its own. Tuning them on past data until the backtest looks better is overfitting.
How much drawdown should I expect from an EA?
Look at the maximum drawdown of its live accounts and the size traded, then assume the future can be worse. No record shows the limit of what can happen. Size the EA so that a deeper drawdown than the past one still fits your plan.
The Bottom Line
- Size settings are yours to choose. Strategy settings are usually best left alone.
- A fixed lot keeps the size steady, and risk percent keeps the planned loss steady.
- Risk per trade isn't total risk: count the open trades, the minimum lot and gaps.
- Read a drawdown figure with the lot and the balance behind it.
- Start from your own limit, keep a cushion, and decide in advance when to stop.
If you are just getting started, read our step-by-step guide to start trading first.
This article is educational and is not investment advice. It doesn't recommend settings for any specific robot. Past results do not predict future results. Trading leveraged products involves risk of loss.
