Max Contracts
Trading Rules & RestrictionsThe maximum number of futures contracts or forex lots a trader can hold simultaneously, as specified by the prop firm rules. This limit prevents excessive exposure and protects against catastrophic losses.
Max contract limits vary by account size and firm. For futures prop firms, the limits are specified per instrument. A $50K TopStep account might allow up to 5 ES (E-mini S&P 500) contracts or 50 MES (Micro E-mini) contracts. Larger accounts proportionally allow more contracts.
These limits apply to total open positions, not per-trade. If your max is 5 ES contracts and you have 3 long, you can only open 2 more (in either direction). Some firms count hedged positions differently -- having 3 long and 2 short might count as 5 contracts or as 1 net contract, depending on the firm.
For forex prop firms, limits are typically expressed as maximum lot size. FTMO does not impose a hard lot limit but your position size is naturally constrained by margin requirements and drawdown rules. Traders should calculate the maximum position size that keeps their risk within daily loss limits.
TopStep $50K: max 5 ES contracts (or 50 MES). Each ES contract has $50/point value. A 20-point adverse move on 5 contracts = $5,000 loss. With a $1,000 daily loss limit, max contracts at 20-point stop means you can only trade 1 ES contract (20 * $50 = $1,000 = daily limit). Using max contracts with any meaningful stop would blow the daily limit.
Max Contracts directly affects whether you pass or fail a prop firm evaluation. Unlike trading your own account where you can recover from mistakes over time, prop firm rules create hard boundaries -- violate them once and you lose your challenge fee and have to start over. Trading rules vary significantly between firms and can catch traders off guard. What is allowed at one firm may be a violation at another. Always verify max contracts rules before placing your first trade on a new account.
Practical example across firms: FTMO and TopStep handle this differently. FTMO is a 2-step firm with static drawdown and a 5% daily loss limit, starting from €155. TopStep is a 1-step firm with trailing drawdown and a 2% daily loss limit, starting from $49. These structural differences mean your approach to max contracts must adapt to whichever firm you choose.
Common mistake: Traders often carry over habits from one firm to another without checking the rules. News trading, overnight holding, weekend positions, and EA usage all vary by firm and sometimes by evaluation phase. Always verify before your first trade.
Position Sizing
The process of determining how many contracts, lots, or shares to trade per position based on your account size, risk tolerance, and the distance to your stop-loss. Proper position sizing is the foundation of risk management.
Lot Size
The standardized quantity of a financial instrument in a single trade. In forex, 1 standard lot = 100,000 units of the base currency. In futures, lot size varies by contract (1 ES = $50/point, 1 NQ = $20/point).
Leverage
The ratio of trading exposure to actual capital required. In forex, leverage can be 1:100 or higher, meaning $1,000 controls $100,000 of currency. In futures, leverage is built into the contract specification through margin requirements.
Risk Per Trade
The maximum dollar amount or percentage of account balance you are willing to lose on a single trade. Most prop firm traders risk 0.5-2% per trade to ensure they can withstand losing streaks without breaching drawdown limits.