Every position-sizing formula ends in the same term: value per point. Get that number wrong and a perfectly reasoned risk plan quietly risks double — or half — what you intended. This is the plumbing under every sized trade.
Standard, mini and micro lots
In forex, a lot is just a unit of contract size, and there are three you’ll meet constantly:
- Standard lot — 100,000 units of the base currency.
- Mini lot — 10,000 units, one-tenth of a standard.
- Micro lot — 1,000 units, one-hundredth of a standard.
The pip value scales the same way: if a standard lot is worth 10 per pip, a mini is worth 1 and a micro is worth 0.10. Micro lots matter more than they seem on a prop account — they’re what let you size precisely on a smaller evaluation balance instead of being forced into risk steps that are too coarse for a tight drawdown limit.
Pip value: how currency and pair change it
A pip is the standard smallest increment a pair is quoted in — the fourth decimal for most pairs, the second decimal for yen pairs. But the value of that pip in your account currency depends on two things people routinely get wrong:
- The quote currency of the pair. Pip value is naturally expressed in the currency on the right side of the pair. For a pair quoted in your account currency, a standard-lot pip is a clean round number. For anything else, it isn’t.
- Your account currency. If your account is denominated in a different currency than the pair’s quote currency, the pip value has to be converted at the current exchange rate. That conversion floats, so your exact per-pip risk floats a little too.
For a pair where the quote currency matches your account, one standard-lot pip lands on a familiar round figure. For everything else, don’t assume — compute it. A lot size calculator does the account-currency conversion automatically so you’re not eyeballing an exchange rate mid-trade.
Futures: tick value and point value
Futures drop the lot abstraction and state the economics directly, which is refreshingly concrete once you learn each contract’s spec.
- Each contract has a tick — the minimum price increment — and a fixed tick value in dollars.
- The point value is what a full one-point move is worth per contract, and it’s the number you’ll usually size from.
Three you’ll meet constantly, with representative point values (always confirm the current spec with the exchange or your platform, as contracts get revised and micro versions exist):
| Contract | Instrument | Point value (approx.) |
|---|---|---|
| ES | E-mini S&P 500 | 50 per point |
| NQ | E-mini Nasdaq 100 | 20 per point |
| CL | Crude Oil | 1,000 per point |
Crude looks alarming until you remember it moves in small point increments, so a normal stop is a fraction of a point. The point is that every futures contract has a known, published multiplier — there’s no guessing, only looking it up.
Converting a dollar risk into lots or contracts
Once you know value per point, sizing is one division — the same formula whether it’s forex or futures:
Size = Risk amount ÷ (Stop distance × Value per point)
- Forex: with a 200 risk amount, a 20-pip stop, and 10 per pip on a standard lot, size = 200 ÷ (20 × 10) = 1.0 lot.
- Futures: with a 200 risk amount, a 4-point stop on ES at 50 per point, size = 200 ÷ (4 × 50) = 1 contract.
Same logic, different plumbing. A position size calculator lets you flip between asset classes without re-deriving the value-per-point each time — which is where most manual errors sneak in.
Cross-currency pairs and the conversion trap
The single most common sizing mistake lives here. When neither side of the pair is your account currency — a classic cross — the pip value has to be converted through the current rate of a third pair. Skip the conversion and your risk is off by whatever that exchange rate happens to be, sometimes by 20–30%.
The trap is that the trade looks sized correctly. The lots are on the ticket, the stop is on the chart, and nothing warns you that your real dollar risk is meaningfully higher than the number you planned. This is exactly the kind of error you only catch after the fact — which is why auto-journaling every fill and reviewing realized R matters: it surfaces the trade where your intended risk and actual risk didn’t line up, before it becomes a habit.
A repeatable checklist for any new instrument
Before you size a symbol you haven’t traded, run the same five questions every time:
- What’s the contract size or lot definition? (100k for a standard forex lot; the published multiplier for a future.)
- What’s the value per point in the instrument’s own currency?
- Does that need converting to my account currency? (Yes for any cross or any future/metal quoted outside your account currency.)
- What’s the smallest size step I can trade? (Micro lots, or single contracts — this sets how precisely I can hit my risk.)
- Does my platform confirm the pip/tick value I calculated? Cross-check before trusting the number.
Doing this by hand is fine for one instrument. Across a portfolio and several prop accounts, it’s where fatigue produces expensive slips. Connecting your platform — whether that’s cTrader or MetaTrader 5 — lets Shibiki read the real contract specs, enforce your intended risk as a hard limit at the broker so a mis-sized ticket is refused before it fills, and auto-journal each fill’s realized R. If you run the same strategy across multiple funded accounts, copying keeps that sizing consistent everywhere at once instead of re-deriving it per account.
Learn the plumbing once, verify it per instrument, and the value-per-point term stops being where your risk plan silently breaks.
Related: Lot Size Calculator · Position Size Calculator · cTrader Integration