1. What is Futures Position Sizing?

Position sizing in futures trading determines how many contracts to trade based on your account risk, stop loss level, and contract size. It's a crucial risk management technique that helps traders limit potential losses.

2. How Does the Calculator Work?

The calculator uses the position sizing formula:

Where:

• \( \text{Account Risk} \) — Maximum amount you're willing to risk (in USD)
• \( \text{Stop Loss} \) — Distance from entry to stop loss (in points)
• \( \text{Contract Size} \) — Value per point movement (in USD)

Explanation: The formula calculates how many contracts you can trade while keeping your risk within predefined limits.

3. Importance of Proper Position Sizing

Details: Proper position sizing helps traders survive losing streaks, manage risk effectively, and stay in the game long enough to be profitable. It prevents overexposure and emotional trading decisions.

4. Using the Calculator

Tips: Enter your total account risk (1-2% of account balance is typical), your stop loss in points, and the contract size (point value). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's a good account risk percentage?
A: Most professional traders risk 1-2% of their account per trade to survive drawdowns.

Q2: How do I determine my stop loss?
A: Use technical analysis to identify logical support/resistance levels where the trade premise would be invalidated.

Q3: Where can I find contract sizes?
A: Your broker's specifications sheet will list the point value for each futures contract.

Q4: Should I round position sizes?
A: Yes, futures contracts can't be fractional, so round down to the nearest whole number.

Q5: How does leverage affect position sizing?
A: The calculator already accounts for leverage through the contract size and stop loss inputs.