Most new funded traders size their positions based on gut feel or a fixed number of contracts. This is one of the fastest ways to lose a funded account. Correct position sizing means risking a defined, consistent percentage of your account on every trade — regardless of how confident you feel.
Why Position Sizing Matters More on Funded Accounts
On your own account, a big loss hurts your balance. On a funded account, a big loss can terminate your contract. The asymmetry is severe: a bad trade doesn't just cost you money, it costs you the account — and the fee you paid to get it.
Additionally, funded accounts have daily loss limits. If you risk 5% per trade and lose twice in a morning, you can hit your daily limit before lunch and be locked out for the rest of the day.
The Core Formula
Every position size calculation starts with the same three inputs:
- Account balance — current equity in your account
- Risk percentage — how much of your account you're willing to lose if stopped out (e.g. 1%)
- Stop loss in ticks or pips — the distance from your entry to your stop loss
Formula
Dollar risk = Account balance × Risk %
Position size = Dollar risk ÷ (Stop loss in ticks × Tick value)
Worked Example — Futures (ES)
Setup
How Much Should You Risk Per Trade?
The right risk percentage depends on your account size and drawdown limit:
- 0.5% per trade — conservative, recommended for challenge accounts or when near drawdown limits
- 1% per trade — standard for most funded traders
- 2% per trade — aggressive, only appropriate with a high-confidence setup and clear drawdown buffer
Rule of Thumb
Your daily loss limit ÷ risk per trade = number of consecutive losses before lockout. At 1% risk with a 3% daily limit, you can lose 3 trades before you're done for the day. At 2% risk, you only get 1 loss. Always check this ratio before the session.
Common Mistakes
- Sizing from conviction, not math. "This trade looks great" is not a position size. Always use the formula.
- Forgetting to account for tick value. NQ and ES have different tick values — a 10-point move is worth very different dollar amounts.
- Not adjusting size after account growth. If your balance grows from $100K to $110K, your 1% risk increases to $1,100. Update your position sizes.
- Using the starting balance, not current balance. Use your actual current equity, not the funded amount.
Use the Calculator
The Position Size Calculator handles all the maths for you — enter your account size, risk %, and stop loss and it returns the exact number of contracts or lots to trade. It covers futures, forex, and indices.