Ask most futures traders how they size a position and the answer is a feeling: “I went 10× because I was confident.” That’s exactly backwards. Leverage doesn’t decide how much you can lose — your position size and your stop do. Here’s how to size a futures position by risk, so a single trade can never hurt you more than you decided in advance. It’s the structural half of staying off tilt: a pre-set size is a size that can’t balloon after a loss.
The mistake: sizing by leverage
Leverage is just a margin multiplier. Two traders can both open 10× on the same coin and have wildly different risk, because risk is set by how far your stop is and how big the position is — not by the leverage number on the screen. Sizing by leverage means your risk changes randomly from trade to trade. Sizing by risk means it’s the same every time, on purpose — which is the whole point of a repeatable, journalable process.
The formula
Decide one number before anything else: the percentage of your account you’re willing to lose on this trade. One percent is a sane default. Then it’s four lines of arithmetic:
Risk amount = Account × Risk %
Stop distance % = |Entry − Stop| ÷ Entry
Position (notional) = Risk amount ÷ Stop distance %
Quantity = Position notional ÷ Entry priceThat’s the entire method — leverage- and direction-agnostic. If you’d rather not do it by hand on every trade, the free position size calculator takes capital, risk %, entry and stop and returns the exact quantity, required margin, and a losses-to-ruin counter, with no login.
A worked BTC example
Say you have a $1,000 account and you’ll risk 1% — that’s $10. You want to long BTC at $60,000 with a stop at $58,800. Your stop distance is $1,200, or 2% ($1,200 ÷ $60,000). Position notional = $10 ÷ 0.02 = $500. Quantity = $500 ÷ $60,000 = 0.0083 BTC. If BTC hits your stop you lose exactly $10 — 1% of the account — no matter what leverage you selected. Leverage only decides how much margin that $500 position locks up.
A sizing table you can read off
Because position size scales with account size and inversely with stop distance, a small table covers most of your decisions. Notional position for a 2% stop distance, at 1% and 2% account risk:
| Account | Risk 1% → notional | Risk 2% → notional |
|---|---|---|
| $1,000 | $500 | $1,000 |
| $5,000 | $2,500 | $5,000 |
| $25,000 | $12,500 | $25,000 |
Halve the stop distance (a 1% stop) and every notional doubles for the same dollar risk; widen it and they shrink. That’s the key intuition: a tighter stop lets you hold a larger position for the same risk, not a smaller one.
Where the stop distance comes from
The formula is only as good as the stop, and the stop should come from the chart, not from the size you wish you could take. Place it where your setup is invalidated — beyond the range, under the structure low, past the level that would prove you wrong — and then let the formula tell you the size. Sizing first and stopping second is how traders end up with a stop tucked just under entry to “afford” a big position, which guarantees they get wicked out of good trades.
Leverage is a margin lever, not a risk lever
In the example above, the $500 position needs $50 of margin at 10× or $25 at 20×. Changing leverage changes the margin, not the $10 you stand to lose. Once you size by risk, higher leverage just frees up collateral — it doesn’t make the trade more dangerous, as long as you don’t use the freed margin to open more risk. This is where most blowups actually come from: not high leverage per se, but using the margin it frees to stack more positions.
The number that keeps you honest: losses to ruin
Risking 1% per trade, it takes dozens of consecutive full-risk losses to halve your account and far more to be effectively ruined — survivable through any normal losing streak. Risk 10% per trade and it takes only about 7 straight losses to halve it. That’s the entire argument for small, consistent risk: it keeps you in the game long enough for your edge to show up. This is standard risk management — the same fixed-fractional logic professional desks run — and it’s the difference between a drawdown and a funeral.
Once every position is sized by rule, the rest of the journal gets easier: your results become comparable in R-multiple, and the impulse to revenge-size after a loss has nothing to grab. Postmortem’s calculator does the arithmetic for you — capital, risk %, entry, stop → exact quantity, required margin, and the losses-to-ruin counter — so every position is sized by a rule instead of a feeling.