How Not to “Bleed Out” a Futures Deposit: Position Sizing Formula (Rule 1–2%)
Most traders lose deposits not because of incorrect indicators or bad signals, but because of a lack of risk management. The mistake is almost always the same: entering “with your entire deposit” or using a random leverage.
Below is the risk math that will help you preserve capital over the long run.
1. Separate Margin and Risk
The main misconception of beginners: “I entered a trade for $100, so my risk is $100.”
In reality, risk is the amount you will lose when the Stop-Loss triggers.
Golden rule: The risk per trade must not exceed 1–2% of your total deposit.
With a $1,000 deposit, your maximum loss in one trade should be $10–$20.
Most traders lose deposits not because of incorrect indicators or bad signals, but because of a lack of risk management. The mistake is almost always the same: entering “with your entire deposit” or using a random leverage.
Below is the risk math that will help you preserve capital over the long run.
1. Separate Margin and Risk
The main misconception of beginners: “I entered a trade for $100, so my risk is $100.”
In reality, risk is the amount you will lose when the Stop-Loss triggers.
Golden rule: The risk per trade must not exceed 1–2% of your total deposit.
With a $1,000 deposit, your maximum loss in one trade should be $10–$20.