Fixed fractional position sizing
Fixed fractional position sizing risks the same percentage of current account equity on every trade: the number of contracts is that percentage of equity divided by the dollar loss per contract if the stop is hit. Size rises after gains and falls after losses, so risk stays proportional to the account.
Senzoukria · Glossary · Updated September 2026
At a glance
- Formula
- Contracts = floor(f × equity ÷ (stop ticks × tick value))
- f
- Fraction of equity risked per trade, e.g. 0.5% or 1%
- After 10 losses at 1%
- Equity × 0.99¹⁰ ≈ −9.6%, not −10%
- In Senzoukria
- Order ticket calculator takes a dollar risk, not a percentage
The calculation
Choose the fraction f of equity you accept to lose if the stop is hit, compute the dollar loss per contract from the stop distance and the tick value, divide, and round down. On a 50,000 dollar account at 1%, the risk budget is 500 dollars. A 20-point stop on MNQ, at 2 dollars per point, costs 40 dollars per contract, so the size is floor(500 ÷ 40) = 12 contracts and the actual risk is 480 dollars. The same budget on ES with an 8-point stop, at 50 dollars per point, allows exactly one contract.
Rounding down matters on full-size contracts. A 30,000 dollar account at 1% cannot trade one ES contract with a 10-point stop, which would risk 500 dollars; micro contracts exist largely to make such sizing possible.
What compounding does
- After a loss, the next trade is smaller, so a losing streak costs less than the sum of its percentages: ten losses at 1% leave 0.99¹⁰ ≈ 90.4% of equity, a 9.6% drawdown.
- After gains, size grows with equity, which accelerates growth when the edge holds and enlarges dollar losses when it stops holding.
- Recovery is asymmetric: a 9.6% drawdown needs a gain of about 10.6% to recover, taken at the smaller size the drawdown produced.
- Integer contracts make the fraction approximate, especially on small accounts.
The prop firm caveat
On an evaluation or funded account, a percentage of the nominal balance is the wrong base. If a 50,000 dollar account has a 2,000 dollar drawdown allowance, risking 1% of the nominal balance, 500 dollars, spends a quarter of the allowance on one trade, and four consecutive losses end the account. The relevant equity is the distance to the drawdown floor, and for a trailing drawdown that distance changes with every new high.
In Senzoukria
The order ticket has an indicative risk calculator: enter a stop distance in ticks and a risk in dollars, and a button offers to size the order to floor(risk ÷ (ticks × tick value)) contracts. It takes a dollar amount, so the percentage of equity is computed by the trader before typing it, and it places neither the order nor a bracket. In the automatic backtest, the strategy script returns a quantity with each decision, but the engine does not pass account equity to the script, so equity-based sizing is not computed by the engine and results are in dollars at the quantities the script chose.
Related
In the same section
- Fixed ratio sizing
- Martingale
- Optimal f
- Volatility sizing
- Fixed range volume profile
- FIX protocol
- First notice day
- Fixed-moneyness skew
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Frequently asked questions
- What percentage should I risk per trade?
- There is no correct universal figure; it depends on the strategy's losing streaks, the account's loss limits and the trader's tolerance. A useful check is to multiply the risk per trade by the losing streak you should expect and compare the result with your daily loss limit and drawdown allowance.
- Is fixed fractional sizing the same as the Kelly criterion?
- Kelly is one specific choice of the fraction, the one that maximizes long-run growth under strong assumptions. Fixed fractional sizing is the general method; most traders use fractions well below Kelly because Kelly's drawdowns are large and its inputs are estimated with error.