FuturesHUB / Position size from risk
Perpetual futures
Position size from risk
Size the position from the loss you will accept at the stop. Leverage is what you adjust afterward so the margin fits the wallet and the liquidation price stays beyond the stop.
The sequence
Pick the account equity you are using for this idea, then the percent of it you are willing to lose if the stop fills. A $10,000 sleeve and a 1% risk budget is $100. Pick the stop distance in percent of price. A stop 2% away means each dollar of notional loses two cents on the way to the stop. Notional equals $100 divided by 0.02, or $5,000.
Margin is that notional divided by leverage. At 5x the $5,000 position posts about $1,000. At 10x it posts about $500. The loss at the stop is still $100, provided the stop fills and provided liquidation is not closer than the stop.
Where the sequence breaks
If liquidation sits between entry and the stop, you will not lose $100 at the stop. You will lose the margin, plus a liquidation fee, at a closer price. Check the ticket's liquidation price immediately after you compute the notional. Lower the leverage until liquidation moves past the stop, or shrink the notional.
The stop distance has to include slippage. A stop-market on a thin book might fill 0.5% worse than the trigger. Size off the distance to a realistic fill, not off the trigger you wish you could have.
The tools workbook
The tools page asks for equity, risk percent, stop distance percent, and leverage. It reports dollar risk, notional, and margin. It caps leverage at 50. It does not send an order, and it does not know your liquidation tier. Take the notional it prints into the venue preview and read the real liquidation price there.
A second block on that page bills funding from a rate you type, and a third block sketches liquidation with the same 0.5% maintenance assumption as the practice desk. Use them as three checks on one idea.
On the ticket
- Write equity, risk percent, and stop distance percent. Multiply equity by the risk percent. Divide by the stop distance. That is notional.
- Divide notional by a modest leverage and check that the wallet can post the margin.
- Preview on the venue. If liquidation is closer than the stop, lower leverage or lower notional and preview again.
- Only then send the entry, with a reduce-only stop at the distance you sized for.
Questions
Should I raise leverage to make the position larger?
Leverage does not increase notional unless you also increase quantity. If you want a larger notional, you are choosing a larger loss at the same stop. Say that explicitly, then size it.
What if I do not have a stop?
Then the distance in the formula is the distance to liquidation, and the loss is the margin plus fees. That is a different plan. Write it down as such.