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Position Sizing, Profit Targets, and Daily Limits

PostedFebruary 16, 2026
UpdatedFebruary 17, 2026
ByBWT Bob - The TickProphet

This section covers how to configure contract quantities, profit targets, and daily trading limits – critical components for risk management and profitability.

Group: 405 – Position Sizing

Position sizing determines how many contracts you trade and how they’re distributed across profit targets.

001 – Position Sizing Mode

Type: Dropdown
Options:

  • FixedQuantity: Trade fixed number of contracts per target
  • FixedPercentage: Distribute total position by percentage
  • FixedRisk: Calculate position size based on dollar risk

Default: FixedQuantity
Description: Method for determining position size.

Mode Details:

FixedQuantity (Most Common):

  • Specify exact contracts for each target
  • Example: Target 1 = 2 contracts, Target 2 = 2 contracts, Target 3 = 1 contract
  • Total position: 5 contracts

FixedPercentage:

  • Specify percentage of total position for each target
  • System calculates contract quantities based on account size or total position
  • Example: 25% / 25% / 25% / 25% across 4 targets
  • If trading 8 contracts, each target gets 2

FixedRisk:

  • Specify dollar amount to risk per trade
  • System calculates how many contracts based on stop loss distance
  • Example: $500 risk, 20-tick stop on ES ($250/contract risk)
  • System trades 2 contracts ($500 ÷ $250 = 2)

002 – Trade Bracket 1 Qty

Type: Integer
Default: 1
Description: Number of contracts for Profit Target #1 (FixedQuantity mode).

003 – Trade Bracket 2 Qty

Type: Integer
Default: 1
Description: Number of contracts for Profit Target #2 (FixedQuantity mode).

004 – Trade Bracket 3 Qty

Type: Integer
Default: 1
Description: Number of contracts for Profit Target #3 (FixedQuantity mode).

005 – Trade Bracket 4 Qty

Type: Integer
Default: 1
Description: Number of contracts for Profit Target #4 (FixedQuantity mode).

Total Position Example:

  • Target 1: 2 contracts
  • Target 2: 2 contracts
  • Target 3: 1 contract
  • Target 4: 0 contracts (disabled)
  • Total Entry: 5 contracts

006 – Fixed $ Risk per Trade

Type: Decimal (Dollars)
Default: 0
Description: Dollar amount to risk per trade (FixedRisk mode only).

Example: Set to $500

  • Stop Loss: 24 ticks on ES = $300 per contract
  • System calculates: $500 ÷ $300 = 1.67 → rounds to 2 contracts

When to Use:

  • Consistent risk per trade regardless of stop size
  • Account-based position sizing
  • Professional risk management

Note: Requires proper stop loss configuration to work correctly.

002-005 – Trade Bracket Percentages

Parameters: Target1Percentage, Target2Percentage, Target3Percentage, Target4Percentage
Type: Integer (Percentage)
Defaults: 25% each
Description: Percentage allocation for each target (FixedPercentage mode).

Example:

  • Total Position: 8 contracts
  • Target 1: 25% = 2 contracts
  • Target 2: 25% = 2 contracts
  • Target 3: 25% = 2 contracts
  • Target 4: 25% = 2 contracts

Note: Percentages should add up to 100%.

Position Sizing Strategies

Conservative: Single Contract Scaling

Mode: FixedQuantity
Target 1: 1 contract
Target 2: 1 contract
Target 3: 1 contract
Target 4: 0 contracts
Total: 3 contracts

Benefits: Low risk, learn the system, small account friendly

Moderate: 50/50 Split

Mode: FixedQuantity
Target 1: 2 contracts (close half)
Target 2: 2 contracts (runner)
Target 3: 0 contracts
Target 4: 0 contracts
Total: 4 contracts

Benefits: Take early profit, let half run for larger wins

Aggressive: Triple Scale-Out

Mode: FixedQuantity
Target 1: 3 contracts (quick profit)
Target 2: 2 contracts (secondary target)
Target 3: 1 contract (runner)
Target 4: 0 contracts
Total: 6 contracts

Benefits: Multiple profit-taking levels, one runner for big moves

Professional: Risk-Based Sizing

Mode: FixedRisk
Fixed $ Risk: $500 per trade
Percentages: 25% / 25% / 25% / 25%

Benefits: Consistent risk, position size automatically adjusts to stop distance

Group: 406 – Profit Targets

Configure up to 4 profit targets with different calculation methods.

001 – Target Calc Mode

Type: Dropdown
Options:

  • 0: Ticks – Fixed tick targets
  • 1: Percent – Percentage of entry price
  • 2: CoreLevels – Use BWT CORE indicator levels
  • 3: ATR – ATR multiple-based targets
  • 4: Opening Range – Percentage of OR size (ORB module)

Default: 0 (Ticks)
Description: Method for calculating profit targets.

Mode Details:

Ticks (Most Common):

  • Fixed, predictable targets
  • Example: Target 1 = 8 ticks, Target 2 = 16 ticks

Percent:

  • Target as % of entry price
  • Example: 0.01 = 1% target
  • Automatically scales with price

CoreLevels:

  • Uses nearest CORE resistance (longs) or support (shorts)
  • Intelligent technical exits
  • Target distance varies by market structure

ATR:

  • Targets based on ATR multiples
  • Adapts to market volatility
  • Example: 1.5 ATR, 2.5 ATR, 4.0 ATR

Opening Range:

  • For ORB module only
  • Targets as % of OR size
  • Example: 100% = target at full OR size from entry

002 – Profit Target #1 (Ticks/Percent)

Type: Decimal
Default: 8.0
Description: First profit target value (Ticks or Percent mode).

Common Settings for ES:

  • Scalping: 4-8 ticks
  • Day Trading: 8-16 ticks
  • Swing: 20-40 ticks

003 – Profit Target #2 (Ticks/Percent)

Type: Decimal
Default: 12.0
Description: Second profit target value.

004 – Profit Target #3 (Ticks/Percent)

Type: Decimal
Default: 16.0
Description: Third profit target value.

005 – Profit Target #4 (Ticks/Percent)

Type: Decimal
Default: 0.0 (Disabled)
Description: Fourth profit target value. Set to 0 to disable.

002-005 – Profit Targets (ATR)

Parameters: ProfitTarget1ATR, ProfitTarget2ATR, ProfitTarget3ATR, ProfitTarget4ATR
Type: Decimal
Defaults: 1.2, 2.4, 4.6, 6.8
Description: ATR multiple targets (ATR mode only).

Example:

  • ATR = 10 ticks
  • Target 1: 1.2 ATR = 12 ticks
  • Target 2: 2.4 ATR = 24 ticks
  • Target 3: 4.6 ATR = 46 ticks

Benefits: Targets automatically adjust to market volatility.

Profit Target #1-4 (Percent Opening Range)

Parameters: ProfitTarget1PercentOpeningRange, etc.
Type: Integer (Percentage)
Defaults: 50%, 100%, 125%, 150%
Description: Target as % of Opening Range size (ORB mode).

Example: OR = 20 ticks

  • 50% = 10 tick target
  • 100% = 20 tick target
  • 125% = 25 tick target

Advanced Target Features: CORE Stop Management

Each profit target can have a “CORE stop” that moves the stop loss to a safer level when that target is filled. This is a professional feature for protecting profits.

Profit Target #1-4 CORE Stop

Parameters: ProfitTarget1Core, ProfitTarget2Core, ProfitTarget3Core, ProfitTarget4Core
Type: Decimal
Defaults: 1.0, 1.0, 2.0, 2.0
Description: When this target fills, move stop to this multiple of entry risk.

Example:

  • Entry: 4500
  • Initial Stop: 4476 (24 ticks)
  • Target 1: 4508 (8 ticks)
  • Target 1 Core: 1.0

When Target 1 fills:

  • Move stop from 4476 to 4476 + (24 × 1.0) = 4500 (breakeven)

Settings:

  • 0.5 = Move stop halfway to entry
  • 1.0 = Move stop to entry (breakeven)
  • 1.5 = Move stop to entry + half the initial risk (lock profit)
  • 2.0 = Move stop to entry + full initial risk

Profit Target #1-4 CORE Use HotZone

Parameters: ProfitTarget1CoreUseHotZone, etc.
Type: Checkbox
Defaults: True, False, True, False
Description: When moving CORE stop, avoid placing exactly on CORE levels.

Recommendation: Enable for targets 1 and 3, disable for 2 and 4 (default pattern).

Profit Target #1-4 CORE Offset

Parameters: ProfitTarget1CoreOffset, etc.
Type: Integer (Ticks)
Defaults: -4, -4, -4, -4
Description: Tick offset when moving CORE stop.

Negative Values: Makes stop more aggressive (closer)
Positive Values: Makes stop more conservative (farther)

Example: Offset = -4

  • Calculated CORE stop: 4500
  • Actual stop placed: 4496 (4 ticks more aggressive)

Profit Target Strategy Examples

Example 1: Quick Scalp + Runner (Most Popular)

Mode: Ticks
Target 1: 8 ticks (2 contracts)
Target 2: 16 ticks (1 contract)
Target 3: 0 (disabled)
Target 4: 0 (disabled)

Target 1 CORE: 1.0 (move to breakeven)
Target 2: Uses trailing stop

Strategy: Take quick 8-tick profit, move to breakeven, let runner hit 16 or trail out.

Example 2: Triple Scale-Out

Mode: Ticks
Target 1: 6 ticks (2 contracts)
Target 2: 12 ticks (2 contracts)
Target 3: 20 ticks (1 contract)
Target 4: 0 (disabled)

Target 1 CORE: 0.5 (move stop halfway)
Target 2 CORE: 1.0 (move to breakeven)
Target 3: Trail with stops

Strategy: Three profit-taking levels, progressive stop movement, final runner.

Example 3: ATR-Based Volatility Targets

Mode: ATR
Target 1: 1.5 ATR (3 contracts)
Target 2: 3.0 ATR (2 contracts)
Target 3: 5.0 ATR (1 contract)
Target 4: 0 (disabled)

Target 1 CORE: 1.0
Target 2 CORE: 1.5

Strategy: Targets adjust to volatility, appropriate for different market conditions.

Example 4: ORB Percentage Targets

Mode: Opening Range
Target 1: 75% of OR (2 contracts)
Target 2: 150% of OR (1 contract)
Target 3: 0 (disabled)
Target 4: 0 (disabled)

Strategy: Specifically for ORB module, targets based on opening range characteristics.

Reward:Risk Ratios

Understanding your reward:risk ratio is critical for profitability.

Calculating R:R

Risk = Stop Loss in ticks
Reward = Profit Target in ticks
R:R = Reward ÷ Risk

Examples

Setup 1:

  • Stop: 24 ticks
  • Target 1: 8 ticks = 0.33:1 (poor)
  • Target 2: 24 ticks = 1:1 (breakeven)
  • Target 3: 48 ticks = 2:1 (good)

Setup 2:

  • Stop: 16 ticks
  • Target 1: 8 ticks = 0.5:1
  • Target 2: 24 ticks = 1.5:1
  • Target 3: 40 ticks = 2.5:1

Win Rate Requirements

  • 1:1 R:R: Need >50% win rate to profit
  • 1.5:1 R:R: Need >40% win rate to profit
  • 2:1 R:R: Need >33% win rate to profit

Strategy Insight: Multiple targets allow you to:

  • Take quick profits (lower R:R but higher win rate)
  • Let runners capture larger moves (higher R:R)
  • Balance overall profitability

Group: 407 – Daily P&L Limits

Critical risk management controls to protect your account.

000 – Trading Limits On

Type: Checkbox
Default: False
Description: Master switch to enable all daily trading limits.

CRITICAL: Always enable this in live trading for account protection!

001 – Daily Profit Target

Type: Decimal (Dollars)
Default: 0 (Disabled)
Description: Stop trading when daily profit reaches this amount.

Example: Set to $1000

  • Strategy makes $1,000 profit
  • All open positions closed
  • No new trades for rest of day

Purpose: Prevents giving back profits. “Quit while you’re ahead.”

002 – Daily Loss Limit

Type: Decimal (Dollars)
Default: 0 (Disabled)
Description: Stop trading when daily loss reaches this amount.

Example: Set to $500

  • Strategy loses $500
  • All open positions closed
  • No new trades for rest of day

Purpose: Critical account protection. Prevents catastrophic losses.

Recommended: Set to 2-3% of account value maximum.

003 – Max Winners

Type: Integer
Default: 0 (Disabled)
Description: Stop trading after this many winning trades.

Example: Set to 3

  • After 3 winning trades, stop for the day

Purpose: Prevents over-trading after success.

004 – Max Losers

Type: Integer
Default: 0 (Disabled)
Description: Stop trading after this many losing trades.

Example: Set to 2

  • After 2 losing trades, stop for the day

Purpose: Prevents revenge trading and emotional decisions after losses.

Recommended: Set to 2-3 for most traders.

005 – Trailing Drawdown Limit

Type: Decimal (Dollars)
Default: 0 (Disabled)
Description: Maximum drawdown from the high-water mark (peak account equity).

How it Works:

  • Tracks highest account equity reached
  • If account drops X dollars from that peak, stops trading

Example:

  • Account starts: $25,000
  • Reaches $27,000 (new high-water mark)
  • Trailing Drawdown: $1,000
  • If account drops to $26,000 (down $1,000 from peak), stops trading

Purpose: Protects profits and prevents large drawdowns.

Professional Feature: Used by institutional traders and prop firms.

006 – Highwater Mark Override

Type: Decimal (Dollars)
Default: 0
Description: Manually set the high-water mark for trailing drawdown calculation.

When to Use:

  • Strategy wasn’t running when account hit new high
  • Want to set a specific high-water mark
  • Multiple strategies on same account

Example: Account is at $28,000 but strategy shows $26,000

  • Set override to $28,000
  • Trailing drawdown now calculated from $28,000

Daily Limit Strategy Examples

Conservative (Small Account)

Trading Limits: On
Daily Profit: $300
Daily Loss: $200
Max Winners: 5
Max Losers: 2
Trailing Drawdown: $300

Philosophy: Protect account, consistent small wins, hard stop on losses.

Moderate (Medium Account)

Trading Limits: On
Daily Profit: $1,000
Daily Loss: $500
Max Winners: 0 (disabled)
Max Losers: 3
Trailing Drawdown: $750

Philosophy: Let winners run, strict loss control, protect profits.

Aggressive (Experienced Trader)

Trading Limits: On
Daily Profit: 0 (disabled)
Daily Loss: $1,000
Max Winners: 0 (disabled)
Max Losers: 4
Trailing Drawdown: $1,500

Philosophy: Maximize profit potential, still protect against disaster scenarios.

Professional (Funded/Prop Account)

Trading Limits: On
Daily Profit: 0 (disabled)
Daily Loss: $800 (2% of $40k account)
Max Winners: 0 (disabled)
Max Losers: 3
Trailing Drawdown: $1,200 (3% of account)

Philosophy: Meet prop firm rules, percentage-based risk limits.

Best Practices for Position Sizing and Targets

1. Start Small

  • Begin with 1 contract while learning
  • Gradually increase as you gain confidence and positive results
  • Never increase size after a losing streak

2. Risk Management Golden Rules

  • Risk no more than 1-2% of account per trade
  • Daily loss limit should be 2-3% of account maximum
  • Never risk more than you can afford to lose

3. Target Placement

For Ticks Mode:

  • Target 1: 0.5-1.0× your stop distance (quick profit)
  • Target 2: 1.5-2.0× your stop distance (standard)
  • Target 3: 2.5-4.0× your stop distance (runner)

Example with 20-tick stop:

  • Target 1: 10-15 ticks
  • Target 2: 30-40 ticks
  • Target 3: 50-80 ticks or trail

4. Position Allocation

Conservative: 50% Target 1, 50% Target 2
Balanced: 40% Target 1, 40% Target 2, 20% Target 3
Aggressive: 33% / 33% / 33% across three targets

5. Daily Limits Implementation

Phase 1 (First Month):

  • Daily Loss Limit: MANDATORY
  • Max Losers: 2-3
  • Other limits: Optional

Phase 2 (Profitable):

  • Add Daily Profit Target
  • Add Trailing Drawdown
  • Keep Max Losers

Phase 3 (Consistent):

  • Optimize all limits based on statistics
  • Adjust based on account growth

6. Regular Review

  • Review trade results weekly
  • Analyze which targets are most profitable
  • Adjust position sizing based on performance
  • Recalculate daily limits as account grows

Common Mistakes to Avoid

1. Over-Sizing

Mistake: Trading too many contracts relative to account size
Fix: Follow 1-2% risk rule religiously

2. Poor R:R on All Targets

Mistake: All targets less than 1:1 R:R
Fix: At least one target should be 1.5:1 or better

3. No Daily Loss Limit

Mistake: Trading without daily loss limit
Fix: Always have a hard stop, especially when starting

4. Moving Targets Mid-Trade

Mistake: Manually adjusting targets while in trade
Fix: Set and forget, let system work

5. Ignoring CORE Stop Management

Mistake: Not utilizing CORE stops to protect profits
Fix: Set Target 1 CORE to 1.0 minimum (breakeven)

Next Section: Exits and Trade Management →

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