How to Use the Calculator
- Enter your Account Size (the total amount of money in your trading account).
- Set your Risk per Trade (the percentage of your account you're willing to risk on a single trade, typically 1-2% for index futures).
- Input the Tick Size (the minimum price movement in the index).
- Provide the Point Value (the monetary value of one tick movement).
- Click the Calculate button to determine your appropriate lot size.
Example
If you have a $50,000 account, want to risk 1% per trade, and the tick size is 0.25 with a point value of $50, your calculation would be:
$50,000 × 0.01 / ($0.25 × $50) = 40 lots
Important Considerations
- This calculator provides a basic method for determining lot size based on risk management principles.
- Always consider additional factors such as volatility, liquidity, and your overall trading strategy.
- For index futures, it's crucial to have sufficient margin in your account to cover potential losses.
- Never risk more than 2-3% of your trading capital on a single trade.