Position sizing tells you how many gold futures contracts you can trade without risking more than your plan allows. The calculation uses three numbers: your maximum dollar risk, the distance from entry to stop loss, and the value of each point for the contract you trade.

The position-size formula

Contracts = Maximum dollar risk ÷ (Stop distance in points × Dollar value per point)

Always round the answer down to a whole contract. Rounding up would put more money at risk than you planned.

GC vs. MGC contract values

ContractValue per pointMinimum tickValue per tick
GC — Gold$1000.10 point$10
MGC — Micro Gold$100.10 point$1

GC moves $100 for every full point per contract. MGC is one-tenth the size, moving $10 for every full point per contract. MGC can make precise risk sizing easier for smaller accounts.

Step-by-step example

Assume your account is $25,000, your risk limit is 1%, and your stop is 2.5 points away.

  1. Find your dollar risk: $25,000 × 1% = $250.
  2. Calculate risk per GC contract: 2.5 points × $100 = $250.
  3. Calculate GC size: $250 ÷ $250 = 1 GC contract.
  4. Or calculate MGC size: 2.5 points × $10 = $25 risk per MGC. Then $250 ÷ $25 = 10 MGC contracts.
Result: The planned risk supports either 1 GC contract or 10 MGC contracts before commissions and possible slippage.

Calculating with ticks

If your platform shows the stop in ticks, use the tick value instead:

Contracts = Maximum dollar risk ÷ (Stop distance in ticks × Dollar value per tick)

A 25-tick stop risks $250 on one GC contract because 25 × $10 = $250. The same stop risks $25 on one MGC contract because 25 × $1 = $25.

Common position-sizing mistakes

  • Choosing contracts before the stop: Place the stop where the trade idea is invalidated, then calculate size.
  • Confusing points and ticks: Gold’s minimum tick is 0.10, so one full point equals 10 ticks.
  • Rounding up: Round down to stay within your maximum risk.
  • Ignoring trading costs: Commissions and slippage can make the final loss slightly larger than the basic calculation.
  • Using the firm’s loss limit as trade risk: Your risk per trade should normally be much smaller than the account’s daily or maximum loss limit.

Frequently asked questions

How much should a beginner risk per trade?

There is no universal percentage. Many traders choose a small fixed amount or a fraction of account balance that lets them follow their plan through a losing streak. Your prop firm’s rules may require an even smaller amount.

Should I use GC or MGC?

Use the contract that lets you stay under your risk limit. MGC offers smaller $10-per-point steps, while one GC contract moves $100 per point.

Can position sizing prevent losses?

No. It cannot predict the trade outcome. It limits the planned damage if the stop is reached and helps keep one trade from becoming an account-ending loss.

Calculate your position size

Use the Garner Gold calculator for GC, MGC, MES, ES, MNQ, NQ, SIL, and SI.

Educational information only—not financial advice. Futures trading involves substantial risk of loss. Confirm current contract specifications, fees, and prop firm rules before trading.