Position sizing in futures comes down to knowing your tick value, defining your maximum risk per trade, and calculating how many contracts that risk allows. Getting this right is the single most important risk management decision you make — more important than entry timing or strategy selection.
What are the tick values for common futures contracts?
Each futures contract has a defined tick size and dollar value per tick. These are set by the exchange and do not change:
| Contract | Tick Size | Tick Value | Point Value |
|---|---|---|---|
| NQ (Micro Nasdaq) | 0.25 | $0.50 | $2.00 |
| NQ (Full Nasdaq) | 0.25 | $5.00 | $20.00 |
| ES (Micro S&P) | 0.25 | $1.25 | $5.00 |
| ES (Full S&P) | 0.25 | $12.50 | $50.00 |
| GC (Gold) | 0.10 | $10.00 | $100.00 |
| SI (Silver) | 0.005 | $25.00 | $5,000.00 |
These values are essential for calculating dollar risk. A 20-tick stop on full NQ means $100 of risk per contract. The same 20-tick stop on SI means $500 per contract.
How do you calculate position size?
The formula is straightforward:
Contracts = Max Dollar Risk / (Stop Distance in Ticks x Tick Value)
For example, with a $10,000 account risking 2% per trade ($200) on full NQ with a 20-tick stop:
- Risk per contract = 20 ticks x $5.00 = $100
- Contracts = $200 / $100 = 2 contracts
If the same parameters applied to GC with a 10-tick stop:
- Risk per contract = 10 ticks x $10.00 = $100
- Contracts = $200 / $100 = 2 contracts
Always round down. If the math gives you 2.7 contracts, trade 2.
What percentage should you risk per trade?
Most professional risk management frameworks recommend risking between 1% and 3% of your account per trade. Here is how that scales:
- $10,000 account at 1% — $100 max risk per trade
- $10,000 account at 2% — $200 max risk per trade
- $25,000 account at 2% — $500 max risk per trade
- $50,000 account at 1% — $500 max risk per trade
Conservative sizing (1%) preserves capital through drawdown periods. Aggressive sizing (3%) maximizes growth but increases the probability of significant drawdowns. There is no universally correct answer — it depends on your risk tolerance, strategy win rate, and account recovery capacity.
How does account size affect instrument selection?
Smaller accounts may not have sufficient margin or risk capacity for full-size contracts. A $5,000 account trading full NQ with a 20-tick stop risks $100 per contract — already 2% of the account on a single contract. Micro contracts (MNQ, MES) provide a way to trade these instruments with proper position sizing on smaller accounts.
For GC and SI, margin requirements are higher and tick values are larger. A $10,000 account may only support 1 SI contract with appropriate risk limits.
How can you automate position sizing?
Use the position sizing calculator to compute contract quantities based on your account size, risk percentage, and stop distance. HuntersAlgo strategies include configurable position sizing parameters that enforce risk limits on every trade automatically.
For additional questions about risk management and strategy configuration, visit the FAQ.
Position sizing does not eliminate risk. Futures trading involves substantial risk of loss and is not appropriate for all investors.