FOUNDATION BEGINNER
NQ, MNQ, ES, and MES Explained
This lesson explains the differences between NQ, MNQ, ES, and MES, including what each market tracks and how much its price movements are worth. By the end of the lesson, you should be able to calculate points, ticks, profit, loss, total trade risk, and an appropriate position size before entering a trade.
- Why Contract Selection Matters
Two traders can enter at the same price, exit at the same price, and capture the exact same market movement but finish with completely different financial results.
This happens because they may be trading different contracts or using a different number of contracts.
For example, one trader may trade MNQ while another trader trades NQ.
Both contracts follow the Nasdaq-100 futures market, but the monetary value of their movement is different.
A 10-point movement on one MNQ contract is worth:
10 points × $2 = $20
The same 10-point movement on one NQ contract is worth:
10 points × $20 = $200
The price movement was identical.
The financial exposure was not.
Before placing any trade, you must know:
• Which contract you are trading
• How much one point is worth
• How much one tick is worth
• How many contracts you are using
• How far away your stop loss is
• How much money you will lose if your stop is reached
You should never discover your total risk after entering the trade.
- What Is NQ?
NQ is the ticker symbol commonly used for the E-mini Nasdaq-100 futures contract.
NQ follows the Nasdaq-100 index.
The Nasdaq-100 includes many of the largest non-financial companies listed on the Nasdaq stock exchange. It is heavily influenced by major technology and growth companies.
Because of this, NQ is often known for:
• Fast price movement
• Large intraday ranges
• Strong reactions to economic news
• Increased volatility around major technology-company earnings
• Rapid changes in unrealized profit and loss
The value of one NQ contract is:
$20 per full point
The minimum price movement is:
0.25 points
That minimum movement is called one tick.
The value of one NQ tick is:
$5
This means that every 0.25-point movement creates a $5 gain or loss for each NQ contract being traded.
NQ example
A trader buys one NQ contract at:
20,000.00
Price rises to:
20,001.00
Price moved one full point.
One NQ point is worth $20.
The trader would have an approximate $20 profit before commissions and fees.
If price moved from 20,000.00 to 20,010.00, the market moved 10 points.
10 points × $20 = $200
One NQ contract would gain approximately $200 before fees.
If that same 10-point movement went against the trader, the trader would lose approximately $200 before fees.
- What Is MNQ?
MNQ is the ticker symbol commonly used for the Micro E-mini Nasdaq-100 futures contract.
MNQ follows the same Nasdaq-100 market as NQ.
The primary difference is the monetary value of the contract.
The value of one MNQ contract is:
$2 per full point
The minimum price movement is:
0.25 points
The value of one MNQ tick is:
$0.50
MNQ is one-tenth the size of NQ.
This means that:
10 MNQ contracts create approximately the same point exposure as one NQ contract.
One NQ contract is worth:
$20 per point
Ten MNQ contracts are worth:
10 × $2 = $20 per point
MNQ example
A trader buys one MNQ contract at:
20,000.00
Price rises to:
20,010.00
Price moved 10 points.
10 points × $2 = $20
The trader would gain approximately $20 before commissions and fees.
If the trader used five MNQ contracts, the calculation would be:
10 points × $2 × 5 contracts = $100
The five-contract position would gain approximately $100 before fees.
- What Is ES?
ES is the ticker symbol commonly used for the E-mini S&P 500 futures contract.
ES follows the S&P 500 index.
The S&P 500 represents approximately 500 large publicly traded companies in the United States across several industries.
Compared with NQ, ES may appear to move fewer points during certain periods. However, each ES point has a higher monetary value.
The value of one ES contract is:
$50 per full point
The minimum price movement is:
0.25 points
The value of one ES tick is:
$12.50
ES example
A trader buys one ES contract at:
6,000.00
Price rises to:
6,005.00
Price moved five points.
5 points × $50 = $250
The trader would gain approximately $250 before commissions and fees.
If price moved five points against the position, the trader would lose approximately $250 before fees.
- What Is MES?
MES is the ticker symbol commonly used for the Micro E-mini S&P 500 futures contract.
MES follows the same S&P 500 market as ES.
The value of one MES contract is:
$5 per full point
The minimum price movement is:
0.25 points
The value of one MES tick is:
$1.25
MES is one-tenth the size of ES.
This means that:
10 MES contracts create approximately the same point exposure as one ES contract.
One ES contract is worth:
$50 per point
Ten MES contracts are worth:
10 × $5 = $50 per point
MES example
A trader buys one MES contract at:
6,000.00
Price rises to:
6,005.00
Price moved five points.
5 points × $5 = $25
The trader would gain approximately $25 before commissions and fees.
If the trader used four MES contracts, the calculation would be:
5 points × $5 × 4 contracts = $100
The four-contract position would gain approximately $100 before fees.
- Contract Value Reference
NQ
Market tracked: Nasdaq-100
Contract type: E-mini
Value per point: $20
Minimum tick size: 0.25 points
Value per tick: $5
MNQ
Market tracked: Nasdaq-100
Contract type: Micro E-mini
Value per point: $2
Minimum tick size: 0.25 points
Value per tick: $0.50
ES
Market tracked: S&P 500
Contract type: E-mini
Value per point: $50
Minimum tick size: 0.25 points
Value per tick: $12.50
MES
Market tracked: S&P 500
Contract type: Micro E-mini
Value per point: $5
Minimum tick size: 0.25 points
Value per tick: $1.25
- What Is a Point?
A point is a full-number movement in the price of a futures contract.
If NQ moves from:
20,000.00 to 20,001.00
NQ moved one point.
If NQ moves from:
20,000.00 to 20,010.00
NQ moved 10 points.
If ES moves from:
6,000.00 to 6,005.00
ES moved five points.
The number of points describes the price movement.
It does not describe the complete financial result.
The financial result depends on:
• The contract being traded
• The number of contracts being used
• Whether the movement was favorable or unfavorable
One point is worth different amounts on different contracts.
One NQ point is worth $20 per contract.
One MNQ point is worth $2 per contract.
One ES point is worth $50 per contract.
One MES point is worth $5 per contract.
- What Is a Tick?
A tick is the smallest amount that a futures contract is permitted to move.
For NQ, MNQ, ES, and MES, the minimum price movement is 0.25 points.
Price may move like this:
20,000.00
20,000.25
20,000.50
20,000.75
20,001.00
Each 0.25 movement is one tick.
Four ticks equal one full point.
The value of each tick depends on the contract.
One NQ tick is worth $5.
One MNQ tick is worth $0.50.
One ES tick is worth $12.50.
One MES tick is worth $1.25.
- Points and Ticks Are Not the Same
Beginners sometimes use the terms point and tick as though they mean the same thing.
They do not.
For NQ, MNQ, ES, and MES:
One tick equals 0.25 points.
Four ticks equal one full point.
Example
NQ moves from:
20,000.00 to 20,000.25
That is:
One tick
0.25 points
$5 on one NQ contract
NQ then moves from:
20,000.00 to 20,001.00
That is:
Four ticks
One point
$20 on one NQ contract
The same one-point movement on one MNQ contract would be worth $2.
- How to Calculate Profit and Loss
The basic calculation is:
Price movement × value per point × number of contracts
You need three pieces of information:
-
How many points did price move?
-
How much is one point worth for the contract?
-
How many contracts were used?
Example 1: Profitable MNQ trade
Contract: MNQ
Direction: Long
Entry: 20,000
Exit: 20,015
Movement: 15 points
Number of contracts: 2
MNQ value: $2 per point
Calculation:
15 × $2 × 2 = $60
Gross result:
$60 profit before commissions and fees
Example 2: Losing MNQ trade
Contract: MNQ
Direction: Long
Entry: 20,000
Exit: 19,985
Movement against the position: 15 points
Number of contracts: 2
Calculation:
15 × $2 × 2 = $60
Gross result:
$60 loss before commissions and fees
Example 3: Profitable NQ trade
Contract: NQ
Direction: Short
Entry: 20,000
Exit: 19,975
Movement: 25 points
Number of contracts: 1
NQ value: $20 per point
Calculation:
25 × $20 × 1 = $500
Gross result:
$500 profit before commissions and fees
Example 4: Losing NQ trade
Contract: NQ
Direction: Short
Entry: 20,000
Exit: 20,025
Movement against the position: 25 points
Number of contracts: 1
Calculation:
25 × $20 × 1 = $500
Gross result:
$500 loss before commissions and fees
Example 5: Profitable ES trade
Contract: ES
Direction: Long
Entry: 6,000
Exit: 6,008
Movement: 8 points
Number of contracts: 1
ES value: $50 per point
Calculation:
8 × $50 × 1 = $400
Gross result:
$400 profit before commissions and fees
Example 6: Profitable MES trade
Contract: MES
Direction: Long
Entry: 6,000
Exit: 6,008
Movement: 8 points
Number of contracts: 3
MES value: $5 per point
Calculation:
8 × $5 × 3 = $120
Gross result:
$120 profit before commissions and fees
- Contract Size Changes the Entire Trade
The number of contracts being traded is called position size.
Increasing the position size increases the value of every point.
For example, imagine NQ moves 10 points in your favor.
One MNQ contract
10 points × $2 × 1 = $20
Five MNQ contracts
10 points × $2 × 5 = $100
Ten MNQ contracts
10 points × $2 × 10 = $200
One NQ contract
10 points × $20 × 1 = $200
Three NQ contracts
10 points × $20 × 3 = $600
The same calculation applies when price moves against the position.
A position capable of making $600 from a 10-point movement is also capable of losing $600 from a 10-point movement.
Position size does not only increase the reward.
It increases the risk at the same time.
- Contract Size Can Affect Your Emotions
A market movement may be normal from a technical perspective but feel extreme when the position is too large.
Imagine price temporarily moves 10 points against a trader.
With one MNQ contract, the unrealized loss is approximately:
10 × $2 = $20
With five MNQ contracts, the unrealized loss is approximately:
10 × $2 × 5 = $100
With one NQ contract, the unrealized loss is approximately:
10 × $20 = $200
With five NQ contracts, the unrealized loss is approximately:
10 × $20 × 5 = $1,000
The chart movement is identical in every example.
The financial and emotional pressure is completely different.
When traders use more size than they can responsibly manage, they may begin to:
• Close valid trades too early
• Move their stop loss farther away
• Remove their stop loss completely
• Take profit before the planned target
• Revenge trade after a loss
• Enter trades that do not meet their rules
• Focus on money instead of market information
A responsible position size should allow you to think clearly and follow your plan.
- Micro Contracts Versus E-mini Contracts
MNQ and MES are micro contracts.
NQ and ES are E-mini contracts.
Micro contracts provide smaller monetary exposure per point.
This can make them useful for practicing:
• Entering at a planned location
• Using a stop loss
• Holding through normal price movement
• Following a profit target
• Managing emotions
• Testing a strategy with smaller exposure
• Scaling into or out of a position
Micro contracts do not automatically make a trade safe.
A trader can still create excessive risk by using too many micro contracts.
Example
One MNQ contract is worth:
$2 per point
Twenty MNQ contracts are worth:
20 × $2 = $40 per point
One NQ contract is worth:
$20 per point
This means 20 MNQ contracts have twice the point exposure of one NQ contract.
The word micro describes the individual contract.
It does not guarantee that the complete position is small.
- One NQ Contract Versus Multiple MNQ Contracts
One NQ contract creates approximately the same point exposure as 10 MNQ contracts.
However, multiple MNQ contracts provide more flexibility when managing a position.
For example, a trader enters with five MNQ contracts.
As price moves toward the target, the trader could close:
• One contract
• Two contracts
• Three contracts
• Four contracts
• All five contracts
This is called scaling out of a position.
A trader using one NQ contract cannot close half of that contract.
The trader must either keep the entire contract open or close the entire contract.
This does not mean scaling out is always the best management method.
It only means micro contracts give traders more control over how much of the position they close.
- How to Calculate Total Trade Risk
Before entering, a trader should know how much money will be lost if the stop loss is reached.
The basic risk calculation is:
Stop distance × value per point × number of contracts
Example 1: MNQ risk
Entry:
20,000
Stop loss:
19,985
Stop distance:
15 points
Contract value:
$2 per point
Number of contracts:
4
Calculation:
15 × $2 × 4 = $120
Total price risk:
$120 before commissions, fees, and possible slippage
Example 2: NQ risk
Entry:
20,000
Stop loss:
19,985
Stop distance:
15 points
Contract value:
$20 per point
Number of contracts:
1
Calculation:
15 × $20 × 1 = $300
Total price risk:
$300 before commissions, fees, and possible slippage
Example 3: MES risk
Entry:
6,000
Stop loss:
5,994
Stop distance:
6 points
Contract value:
$5 per point
Number of contracts:
3
Calculation:
6 × $5 × 3 = $90
Total price risk:
$90 before commissions, fees, and possible slippage
Example 4: ES risk
Entry:
6,000
Stop loss:
5,994
Stop distance:
6 points
Contract value:
$50 per point
Number of contracts:
2
Calculation:
6 × $50 × 2 = $600
Total price risk:
$600 before commissions, fees, and possible slippage
- How to Calculate Position Size
You can use your maximum risk limit to determine how many contracts may fit the trade.
The process is:
-
Identify the planned entry.
-
Identify the correct invalidation point.
-
Calculate the stop distance.
-
Calculate the risk for one contract.
-
Divide the maximum trade risk by the risk for one contract.
The basic position-size calculation is:
Maximum trade risk ÷ risk for one contract
Example 1: MNQ position size
Maximum trade risk:
$100
Stop distance:
10 points
MNQ value:
$2 per point
Risk for one contract:
10 × $2 = $20
Position-size calculation:
$100 ÷ $20 = 5
Maximum position size:
Five MNQ contracts
Example 2: MES position size
Maximum trade risk:
$150
Stop distance:
10 points
MES value:
$5 per point
Risk for one contract:
10 × $5 = $50
Position-size calculation:
$150 ÷ $50 = 3
Maximum position size:
Three MES contracts
Example 3: NQ position size
Maximum trade risk:
$300
Stop distance:
15 points
NQ value:
$20 per point
Risk for one contract:
15 × $20 = $300
Position-size calculation:
$300 ÷ $300 = 1
Maximum position size:
One NQ contract
- What If the Position Size Does Not Divide Evenly?
The position-size calculation will not always produce a perfect whole number.
Suppose your maximum trade risk is:
$100
Your MNQ stop distance is:
15 points
Risk for one MNQ contract:
15 × $2 = $30
Three MNQ contracts would risk:
$30 × 3 = $90
Four MNQ contracts would risk:
$30 × 4 = $120
Four contracts would exceed the $100 risk limit.
The maximum position size would therefore be three MNQ contracts.
When the next contract would exceed your maximum risk, round down.
Do not round up because you want a larger potential profit.
- The Stop Loss Comes Before the Position Size
A trader should not select a large position first and then force the stop loss to fit that position.
The correct order is:
-
Identify where the trade idea becomes invalid.
-
Calculate the distance between the entry and invalidation point.
-
Calculate the risk for one contract.
-
Select the number of contracts that fits the risk limit.
The stop loss should be connected to the trade idea.
The position size should then be adjusted to fit the stop.
A trader should not place an unnaturally tight stop simply because the desired number of contracts creates too much financial risk.
If the correct stop creates too much risk, the trader has several choices:
• Use fewer contracts
• Use a micro contract
• Wait for a better entry
• Skip the trade
Skipping a trade is better than taking a position that violates your risk rules.
- Margin Is Not the Same as Trade Risk
Margin is the amount your broker or trading platform requires to open and maintain a position.
Trade risk is the amount you may lose based on:
• Your entry
• Your stop loss
• The contract value
• The number of contracts
A platform may allow you to open a position that is much larger than you can responsibly manage.
The fact that the order is accepted does not mean the risk is appropriate.
Example
Suppose a platform allows a trader to open two NQ contracts.
The planned stop is 20 points away.
The trade risk would be:
20 points × $20 × 2 contracts = $800
The important question is not only:
“Will the platform allow me to enter?”
The more important question is:
“Does an $800 loss fit my risk plan?”
Margin controls whether the position can be opened.
Your risk plan determines whether the position should be opened.
- Commissions and Fees
The calculations in this lesson show gross profit and loss.
Gross profit or loss is the result before trading costs.
Net profit or loss is the result after trading costs.
Trading costs may include:
• Broker commissions
• Exchange fees
• Regulatory fees
• Platform fees
• Market-data fees
• Evaluation or funded-account fees
A trade showing a $100 gross profit may produce less than $100 in net profit after costs.
A losing trade may also cost slightly more than the calculated price loss after commissions and fees are added.
Always review the current fee structure for your broker or trading platform.
- What Is Slippage?
Slippage happens when an order is filled at a different price than expected.
For example, a trader places a stop order expecting to exit at:
20,000
During fast market movement, the order fills at:
19,998
The trader experienced two points of slippage.
Slippage can occur during:
• Major economic announcements
• Rapid price movement
• Low-liquidity conditions
• Market openings
• Unexpected news
• Large price gaps
A stop loss helps control risk, but it does not guarantee an exact exit price during every market condition.
The actual loss may occasionally be larger than the original calculation.
- NQ and ES Do Not Always Move the Same Way
NQ and ES are both index futures markets, but they track different indexes.
NQ follows the Nasdaq-100.
ES follows the S&P 500.
Because the indexes contain different company weightings, the two markets may not move identically.
NQ is more heavily influenced by large technology and growth companies.
ES represents a broader collection of industries.
Sometimes NQ and ES will move in the same direction.
Other times, one market may display more strength or weakness than the other.
A setup appearing on NQ is not automatically valid on ES.
Each market must be analyzed based on its own price action and context.
- Why Beginners Often Start With MNQ or MES
Micro contracts allow traders to experience real market movement with less dollar exposure per point.
They can help beginners practice:
• Following a trading plan
• Entering only when rules are met
• Using a logical stop loss
• Accepting a controlled loss
• Holding toward a planned target
• Managing emotional reactions
• Recording accurate trading data
• Respecting a daily loss limit
A trader should earn the right to increase size through consistent execution.
Increasing size should come after demonstrating the ability to:
• Follow rules consistently
• Accept losses without revenge trading
• Avoid unnecessary trades
• Keep accurate records
• Use proper stop losses
• Remain disciplined across a meaningful number of trades
Larger contracts should not be used simply because smaller profits feel boring.
Common Beginner Mistake
“I want to make $500 today, so I need to use one NQ contract.”
This thinking begins with the desired financial result instead of the quality of the trade.
The amount you want to make does not determine:
• Whether a valid setup will appear
• How far the correct stop should be
• How much the market will move
• Whether the trade will win
A disciplined trader asks:
Is there a valid setup?
Where is the entry?
Where does the idea become invalid?
How far away is the stop?
How much am I allowed to risk?
Which contract and position size fit that risk?
The contract should be selected based on the trade and risk plan, not the amount of money the trader wants to make.
Practical Example
Imagine a trader identifies a possible long trade on NQ.
Entry:
20,000
Stop loss:
19,985
Profit target:
20,030
Maximum risk:
$300
Step 1: Calculate the stop distance
20,000 − 19,985 = 15 points
Step 2: Calculate the risk for one NQ contract
15 points × $20 = $300
Step 3: Determine the NQ position size
The trader’s maximum risk is $300.
One NQ contract risks $300.
The maximum position size is:
One NQ contract
Step 4: Calculate the potential reward
20,030 − 20,000 = 30 points
30 points × $20 = $600
Step 5: Calculate the risk-to-reward ratio
The trader is risking $300 to potentially make $600.
That creates a:
1:2 risk-to-reward ratio
MNQ alternative
The same trade could be taken with MNQ.
The stop is still 15 points.
Risk for one MNQ contract:
15 × $2 = $30
To risk approximately $300, the trader could use:
$300 ÷ $30 = 10 MNQ contracts
Ten MNQ contracts would create approximately the same point exposure as one NQ contract.
However, the trader is not required to use the full $300 risk allowance.
The trader could use fewer MNQ contracts to reduce the total risk.
Knowledge Check
Question 1
How much is one full point worth on one NQ contract?
A. $2
B. $5
C. $20
D. $50
Answer: C
Question 2
How much is one full point worth on one MNQ contract?
A. $0.50
B. $2
C. $5
D. $20
Answer: B
Question 3
How much is one full point worth on one ES contract?
A. $5
B. $12.50
C. $20
D. $50
Answer: D
Question 4
How much is one full point worth on one MES contract?
A. $1.25
B. $2
C. $5
D. $50
Answer: C
Question 5
How many ticks equal one full point on NQ, MNQ, ES, and MES?
A. Two
B. Four
C. Five
D. Ten
Answer: B
Question 6
How much is one tick worth on one NQ contract?
A. $0.50
B. $1.25
C. $5
D. $20
Answer: C
Question 7
How much is one tick worth on one ES contract?
A. $5
B. $10
C. $12.50
D. $50
Answer: C
Question 8
A trader uses three MNQ contracts and captures a 10-point movement. What is the gross result?
A. $20
B. $30
C. $60
D. $600
Answer: C
Question 9
A trader uses one NQ contract with a 15-point stop. What is the approximate price risk?
A. $30
B. $75
C. $150
D. $300
Answer: D
Question 10
Which statement is correct?
A. Micro contracts cannot produce large losses.
B. Position size should be selected based on the desired profit.
C. The stop distance and contract value should be calculated before entering.
D. Margin represents the maximum amount a trader can lose.
Answer: C
Question 11
A trader uses two MES contracts with an eight-point stop. How much is the approximate price risk?
A. $40
B. $80
C. $100
D. $800
Answer: B
Question 12
A trader has a maximum risk of $100. One contract would risk $30. What is the maximum number of contracts that stays within the limit?
A. Two
B. Three
C. Four
D. Five
Answer: B
Lesson Assignment
Complete this assignment before moving to Lesson 3.
Part 1: Contract Values
Write the value per point and the value per tick for each contract.
NQ
Value per point:
Value per tick:
MNQ
Value per point:
Value per tick:
ES
Value per point:
Value per tick:
MES
Value per point:
Value per tick:
Part 2: Profit and Loss Calculations
Scenario A
Contract: MNQ
Number of contracts: 4
Movement in your favor: 18 points
Calculate the gross profit.
Answer:
18 × $2 × 4 = $144 profit before fees
Scenario B
Contract: NQ
Number of contracts: 2
Movement against the position: 12 points
Calculate the gross loss.
Answer:
12 × $20 × 2 = $480 loss before fees
Scenario C
Contract: MES
Number of contracts: 5
Movement in your favor: 7 points
Calculate the gross profit.
Answer:
7 × $5 × 5 = $175 profit before fees
Scenario D
Contract: ES
Number of contracts: 1
Movement against the position: 6 points
Calculate the gross loss.
Answer:
6 × $50 × 1 = $300 loss before fees
Part 3: Risk Calculations
Scenario E
Contract: MNQ
Entry: 20,000
Stop loss: 19,982
Number of contracts: 3
Calculate:
-
The stop distance
-
The risk for one contract
-
The total trade risk
Answer:
Stop distance:
20,000 − 19,982 = 18 points
Risk for one contract:
18 × $2 = $36
Total trade risk:
$36 × 3 = $108 before fees and possible slippage
Scenario F
Contract: MES
Entry: 6,000
Stop loss: 5,992
Number of contracts: 4
Calculate:
-
The stop distance
-
The risk for one contract
-
The total trade risk
Answer:
Stop distance:
6,000 − 5,992 = 8 points
Risk for one contract:
8 × $5 = $40
Total trade risk:
$40 × 4 = $160 before fees and possible slippage
Part 4: Position-Size Calculations
Scenario G
Maximum trade risk: $120
Contract: MNQ
Stop distance: 15 points
Calculate the maximum number of contracts that stays within the risk limit.
Answer:
Risk for one MNQ contract:
15 × $2 = $30
Position size:
$120 ÷ $30 = 4
Maximum position size:
Four MNQ contracts
Scenario H
Maximum trade risk: $200
Contract: MES
Stop distance: 12 points
Calculate the maximum number of contracts that stays within the risk limit.
Answer:
Risk for one MES contract:
12 × $5 = $60
Three MES contracts would risk:
$60 × 3 = $180
Four MES contracts would risk:
$60 × 4 = $240
The maximum position size that stays within the $200 limit is three MES contracts.
Key Takeaways
• NQ and MNQ follow the Nasdaq-100 futures market.
• ES and MES follow the S&P 500 futures market.
• NQ is worth $20 per point and $5 per tick.
• MNQ is worth $2 per point and $0.50 per tick.
• ES is worth $50 per point and $12.50 per tick.
• MES is worth $5 per point and $1.25 per tick.
• Four ticks equal one full point on all four contracts.
• Position size changes both profit potential and loss exposure.
• Micro contracts offer smaller exposure per contract but can still create large losses when too many contracts are used.
• The stop distance should be based on where the trade idea becomes invalid.
• Position size should be adjusted to fit the stop and maximum risk limit.
• Margin determines whether a position can be opened, but it does not determine whether the position is responsible.
• Profit, loss, and total risk should be calculated before entering a trade.
Final Lesson Reminder
Knowing how much a contract is worth does not tell you when to buy or sell.
It tells you how much money is at risk when you make that decision.
Before entering any trade, you should be able to answer:
Which contract am I trading?
How many contracts am I using?
How much is one point worth?
How far away is my stop loss?
How much will I lose if the stop is reached?
How much could I make if the target is reached?
Does this position fit my risk plan?
If you cannot answer those questions before entering, you are not ready to place the trade.
In Lesson 3, you will learn how futures trading sessions work, why market behavior changes throughout the day, and why the time you choose to trade matters.
Educational Disclaimer
Tick Lab is provided for educational and informational purposes only. Nothing in this lesson should be interpreted as financial advice, investment advice, or a guarantee of trading results. Futures trading involves substantial risk and may not be suitable for everyone. Contract specifications, commissions, margin requirements, and trading rules should always be confirmed through your broker, trading platform, and the relevant exchange before placing a trade.