Position sizing with 1R: turn a stop into a contract count (MES & MNQ)
How to size every futures trade from one fixed risk unit (1R): put the stop where the idea is wrong, convert it to ticks and dollars with costs included, divide, and always round down. Worked example on Micro E-mini S&P 500 (MES), plus the case where the answer is zero.
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In this video
- 0:00 Intro
- 0:14 1R
- 0:39 Contract specs
- 1:00 The formula
- 1:20 Worked example
- 1:54 Zero contracts
- 2:17 Recap
- 2:31 Free calculator
Key points
- 1R is a fixed percentage of the account that one stopped-out trade may cost, set before the session.
- Contracts = risk $ / (stop ticks x tick value), always rounded down; MES ticks are $1.25, MNQ ticks $0.50.
- If the formula gives zero contracts, skip the trade rather than tightening the stop or oversizing.
- Put commissions and stop slippage inside the per-contract risk, and journal results as net R.
- Recalculate 1R on a fixed schedule, never mid-session, and never widen a stop after entry.
Examples use round, illustrative numbers and are not actual trades or results. Education only — not investment, tax or legal advice. Narration uses two AI-generated voices.
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Turn any stop into a contract count, rounded down and costs included, plus an email when new guides and the playbook are published.