Position Sizing for Perpetual Futures: The Complete Guide
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Most traders pick leverage first and hope for the best. Professional traders do the opposite: they calculate position size from their stop loss, ensuring every trade risks the same percentage of capital regardless of the setup.
Why Leverage Is the Wrong Starting Point
Leverage is not a decision — it is a consequence. When you pick "10x leverage" before knowing where your stop loss sits, you have no idea how much capital you are risking. A 10x long on ETH with a 1% stop risks 10% of your account. The same 10x with a 5% stop risks 50%.
The correct approach reverses the process: decide how much capital to risk (say 1%), set a stop loss where your thesis is invalidated, and let the math determine the position size and resulting leverage.
The Risk-Based Formula
Position sizing for perpetual futures follows a simple formula:
Position Size = (Account × Risk%) / (|Entry - Stop Loss| / Entry)For example, with a $10,000 account, 1% risk ($100), entering BTC at $65,000 with a stop at $64,350 (1% distance):
Size = $100 / 0.01 = $10,000 notional → 1x leverageIf your stop is tighter — say 0.25% away — the same $100 risk produces a $40,000 position (4x leverage). Leverage is just the output.
Accounting for Fees and Slippage
On Hyperliquid, taker fees are 0.035% and maker fees are 0.01%. A round trip (entry + exit) costs 0.02% to 0.07% of notional value. On a $10,000 position, that is $2 to $7. Your effective risk is larger than you think if you ignore fees.
Slippage adds another cost, especially during volatile moves when your stop gets filled at a worse price than expected. Professional traders add a slippage buffer (typically 0.05%–0.15% depending on the asset's liquidity and your position size relative to order book depth).
When to Size Up vs. Size Down
Not all trades deserve the same risk. A high-conviction setup with confluence across multiple timeframes and confirmations (e.g., orderflow absorption at a key level with structure break) might warrant 2% risk. A speculative counter-trend scalp should probably be 0.25%.
Advanced approaches like adaptive sizing go further: adjusting risk dynamically based on your recent performance, session, and win rate by setup type. The Kelly Criterion provides a mathematical framework for this — a topic we cover in a dedicated article.
Common Mistakes
- Fixed leverage mentality — Always using 10x regardless of stop distance.
- Ignoring funding costs — On Hyperliquid, funding is charged every hour. A 0.01% funding rate costs 0.24%/day on your notional position.
- Moving the stop to fit the size — Your stop should be where your thesis breaks, not where your account can handle the loss.
- No daily loss cap — Without a maximum daily loss, a tilt spiral can blow through weeks of gains in one session.
Automating Position Sizing
Calculating all this by hand before every trade is slow and error-prone. The PerpLog Position Sizer automates the full formula — you set your stop loss on the chart, pick your risk percentage, and it calculates the exact position size including fees and slippage buffer. Click execute and the trade is placed directly on Hyperliquid.
PerpLog's Position Sizer calculates the perfect position size for every trade on Hyperliquid — including fees, slippage, and R:R targets.
Try Position Sizer FreeFrequently asked questions
What is risk-based position sizing?
Risk-based sizing inverts the usual question. Instead of choosing leverage first, you choose how much capital you're willing to lose on the trade (typically 1% of account), then derive position size from the stop-loss distance. This keeps your dollar risk constant regardless of volatility or stop placement.
Why not just pick a leverage like 10x?
Leverage is not a decision — it is a consequence of position size and account size. A 10x long with a 1% stop risks 10% of your account; a 10x long with a 5% stop risks 50%. Picking leverage first means you have no idea how much you are actually risking.
How much should I risk per trade?
Most professional traders risk 0.5%–1% of account equity per trade. With a 50% win rate at 1.5R, 1% risk per trade produces strong long-term growth with manageable drawdowns. Higher than 2% per trade exposes you to severe drawdown sequences that most traders cannot psychologically endure.
Do fees and slippage really matter for sizing?
Yes — significantly. On Hyperliquid, a $10,000 round trip costs $2-$7 in fees, and slippage can add another $5-$15. A position sized to risk exactly $100 will actually lose closer to $115-$125 once costs are included. Proper position sizers (including PerpLog's) include round-trip costs in the denominator.