Position Size Calculator
Learn how to calculate the right trade size for futures, forex, and stocks
What is Position Sizing?
Position sizing is the process of determining how many shares, contracts, or lots to trade based on your risk tolerance. It's the most important risk management technique in trading - get it wrong and you can blow your account on a single bad trade.
The Position Size Formula
Position Size = Risk Amount / Risk Per Unit
Risk Amount = Account Balance x Risk Percentage (1-2%)
Risk Per Unit = Stop Loss Distance x Point/Tick Value
Position Sizing for Futures
Futures contracts have fixed tick values. Here are the most popular contracts:
| Contract | Point Value | Tick Size | Tick Value |
|---|---|---|---|
| ES (S&P 500) | $50 | 0.25 | $12.50 |
| NQ (Nasdaq) | $20 | 0.25 | $5.00 |
| MES (Micro S&P) | $5 | 0.25 | $1.25 |
| MNQ (Micro Nasdaq) | $2 | 0.25 | $0.50 |
| CL (Crude Oil) | $1,000 | 0.01 | $10.00 |
| GC (Gold) | $100 | 0.10 | $10.00 |
Margin Disclaimer
Margin requirements change frequently and vary by broker. Always verify current margins with your broker before trading.
Position Size Examples
Example 1: ES Futures (S&P 500)
Given:
- Account: $50,000
- Risk: 1% ($500)
- Stop Loss: 10 points
- Point Value: $50
Calculation:
Risk per contract = 10 x $50 = $500
Contracts = $500 / $500
= 1 contract
Example 2: MES Futures (Micro S&P)
Given:
- Account: $10,000
- Risk: 1% ($100)
- Stop Loss: 10 points
- Point Value: $5
Calculation:
Risk per contract = 10 x $5 = $50
Contracts = $100 / $50
= 2 contracts
Example 3: NQ Futures (Nasdaq)
Given:
- Account: $100,000
- Risk: 2% ($2,000)
- Stop Loss: 50 points
- Point Value: $20
Calculation:
Risk per contract = 50 x $20 = $1,000
Contracts = $2,000 / $1,000
= 2 contracts
Position Sizing for Prop Firms
If you're trading a prop firm account (Apex, Topstep, etc.), position sizing becomes even more critical. You need to account for:
Prop Firm Tip
For a $50,000 evaluation with $2,500 max drawdown, treat your risk amount as a percentage of the drawdown, not the account size. Risk 2-5% of drawdown per trade ($50-125).
The 1% and 2% Rules
Professional traders typically follow strict risk rules:
Frequently Asked Questions
How do you calculate position size?
Position Size = Risk Amount / (Stop Loss Distance x Point Value). Risk Amount is typically 1-2% of your account balance.
What is the 2% rule in trading?
The 2% rule means never risking more than 2% of your trading account on any single trade. This helps protect your capital during losing streaks.
How many ES contracts can I trade with $50,000?
With a $50,000 account risking 1% ($500) and a 10 point stop loss on ES ($50/point), you could trade 1 contract. With a 5 point stop, you could trade 2 contracts.
What is proper position sizing?
Proper position sizing means adjusting your trade size so that if you hit your stop loss, you only lose a predetermined percentage of your account (usually 1-2%).
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Risk Disclosure: Trading involves substantial risk of loss and is not suitable for all investors. This content is for educational purposes only and does not constitute financial advice.
Last updated: December 2025