Position size is the only risk decision you make on every single trade, and it is one line of arithmetic. Traders get it wrong by sizing in contracts ("I always trade two") instead of in dollars, or by forgetting that the micro and the full contract of the same market have different tick values. Here is the line, the table, and two examples.
The line
contracts = dollars at risk ÷ (stop in ticks × dollars per tick), rounded down. Rounding up puts you over the risk you chose; rounding down leaves a little unused, which is the right side to err on inside a drawdown rule.
Tick values (CME contract specifications)
| Symbol | Contract | Minimum tick | Dollars per tick |
|---|---|---|---|
ES |
E-mini S&P 500 | 0.25 pt | $12.50 |
MES |
Micro E-mini S&P 500 | 0.25 pt | $1.25 |
NQ |
E-mini Nasdaq-100 | 0.25 pt | $5.00 |
MNQ |
Micro E-mini Nasdaq-100 | 0.25 pt | $0.50 |
YM |
E-mini Dow | 1 pt | $5.00 |
MYM |
Micro E-mini Dow | 1 pt | $0.50 |
RTY |
E-mini Russell 2000 | 0.10 pt | $5.00 |
M2K |
Micro E-mini Russell 2000 | 0.10 pt | $0.50 |
CL |
Crude oil | $0.01 | $10.00 |
MCL |
Micro crude oil | $0.01 | $1.00 |
GC |
Gold | $0.10 | $10.00 |
MGC |
Micro gold | $0.10 | $1.00 |
The micro is one tenth of the full contract in every case above. Commissions and fees are extra and vary by broker; add the round-trip cost per contract to the stop before you divide if you want the risk figure to be the real one.
Example 1: $300 risk, 12-tick stop, MES
12 ticks × $1.25 = $15 at risk per contract. $300 ÷ $15 = 20 contracts. On ES the same stop costs $150 per contract, so the same $300 risk allows 2 contracts, and 3 would be $450, half again what you decided to risk.
Example 2: $500 risk, 20-tick stop, MNQ
20 ticks × $0.50 = $10 per contract. $500 ÷ $10 = 50 contracts. If your account or firm caps you at 20 micros, the arithmetic runs the other way: 20 contracts × $10 = $200 is the most you can risk at that stop, and a wider stop means fewer contracts, not a bigger loss.
Where the dollar risk comes from
The dollars-at-risk figure should come from the account, not from the setup. A common rule inside an evaluation is a fixed fraction of the remaining cushion to the drawdown floor, so that a run of losses shrinks size automatically. If the cushion is $1,200 and you risk a tenth of it, the next trade risks $120; after a loss the cushion is $1,080 and the next trade risks $108. The trailing drawdown article works through where that cushion number comes from day by day.
Tools that do this for you
- The Funded Trader Toolkit has the position size calculator with the table above built in, a challenge planner that shows how many losses in a row would fail the account at your size, and a trade journal with P&L by setup.
- The Combine Pass Planner turns your real win rate and average win and loss into expectancy, days to target and an estimated pass probability before you pay for the next evaluation.
- The free pre-trade checklist and daily risk card is two printable pages: loss room, distance to the floor, size for today.
- All four workbooks together are the Prop Firm Trader Bundle.
By Addison Lopez, Workshop Media Co. Tick sizes and values are the exchange's published contract specifications at the time of writing; confirm them with your broker's contract page, and treat nothing here as advice to take any particular trade.
Free: check out with your email address, nothing to pay, and the download link arrives by email.
- The pre-trade checklist and daily risk card: two pages to print before you trade an evaluation: 13 checks, tick values for 10 contracts, the losses-in-a-row table.