Equity-Based Position Sizing and Automated Stop Management
Summary
This tutorial describes a workflow for sizing perpetual futures orders from available account balance and automating exits with take-profit and stop-loss conditional orders. It obtains market metadata, including contract value, quantity limits and precision, then converts a balance-based allocation into contract quantity using the current price and contract value. It emphasizes checking minimum and maximum order sizes and rounding to exchange precision. It also explains that exit order direction must oppose the open position and gives direction-dependent trigger-price calculations.
The workflow tracks order state, monitors both conditional exits, and cancels the remaining order after one exit triggers. The article says conditional orders are supported in live trading on the described platform but not in its backtester, so this process cannot be fully verified there. It recommends testing quantity calculations, trigger prices and state changes before deployment. A key limitation is that sizing a fixed share of balance sets exposure, but does not by itself define the amount at risk; actual loss also depends on leverage, stop distance, execution and slippage.
Key ideas
- Convert a chosen share of available balance into contracts using price and contract face value.
- Apply exchange quantity limits and precision rules before submitting an order.
- Set exit order direction opposite to the position and calculate triggers according to long or short exposure.
- Monitor paired take-profit and stop-loss orders, canceling the untriggered order after an exit.
- A balance allocation alone does not specify loss risk without accounting for stop distance and execution.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.