Ask a struggling trader how many contracts they trade and you will hear a feeling: “usually two, sometimes five if I really like it.” Ask a funded trader and you will hear math. Position sizing is the one skill where the answer is genuinely just arithmetic, and it is still the number one account killer we see. Let us fix that in ten minutes.
Contracts = risk per trade divided by (stop distance in points times dollars per point).
That is it. Three numbers. NQ moves $20 per point, MNQ moves $2 per point. So if you are willing to risk $200 on a trade and your stop is 25 points away: on MNQ that is $200 / (25 x $2) = 4 contracts. On NQ the same trade is $200 / (25 x $20) = 0.4 contracts, which rounds down to zero. The formula just told you something important: that trade does not exist on the full-size contract at your risk level. Trade the micro or skip it.
Not from confidence. Not from how last week went. It comes from your drawdown. Decide the maximum losing streak you want to survive comfortably: we suggest planning for at least 10 straight losses without real damage. If your account or eval has a $2,500 drawdown, risking $250 per trade means ten losses ends you. Risking $100 gives you 25 chances for the edge to show up. Small risk per trade is not timid, it is how you stay in the game long enough to win it.
Here is the mistake in one sentence: traders pick a contract count first, then move the stop closer to make the risk feel okay. That is backwards, and it turns good setups into losers because the stop sits inside normal noise. The market decides where the stop belongs: beyond the level, beyond the structure, outside the chop. You decide the dollar risk. The formula converts one into the other. If the honest stop makes the size too small to bother with, the answer is a smaller contract, not a dumber stop.
On an eval, your real account size is not the balance, it is the distance to the trailing drawdown. A $50,000 eval with a $2,000 trailing drawdown is a $2,000 account wearing a $50,000 costume. Size off the $2,000. This single reframe is why some traders cruise through evals while others with the same win rate get stopped out by the rules. We wrote more about that pattern in why most traders fail prop evals.
Sizing tells you how much. Key levels tell you where, which is what makes an honest stop possible in the first place: a stop just beyond a real wall is a stop with a reason. Grab the free daily NQ levels, run the formula before the open, and the “how many contracts” question is answered before emotions get a vote. The full level map and live sizing decisions every weekday morning are part of STS4x Pro.
Reading about levels is one thing. Watching them trade in real time is another. STS4x members get the full daily key levels for NQ, ES, and GC, plus live trading sessions every weekday at 9:30 AM ET where the systems run out loud.
See what Pro includes Free daily NQ levels