Fixed Ratio Position Size Calculator

How to Use the Fixed Ratio Position Size Calculator

Fixed Ratio position sizing, developed by Ryan Jones, determines a contract tier from accumulated closed profit and a parameter called delta. The formula does not measure stop distance, instrument value, margin, or maximum acceptable loss.

1. Enter Cumulative Closed Profit: Use profit accumulated from the starting point of the sizing program. Do not enter total account balance.
2. Enter Delta: Delta controls how much additional profit the formula requires as contract count grows.
3. Read the Formula Tier: The output is the contract count implied by Fixed Ratio math, not a personalized recommendation.
4. Check Both Thresholds: The current and next cumulative-profit thresholds make the stepwise rule explicit.

What is Fixed Ratio Position Sizing?

Fixed Ratio is a money management method that scales position size with accumulated closed profit rather than with a fixed percentage of account risk. With cumulative profit P and delta Δ, the tier is N = floor((1 + √(1 + 8P/Δ)) / 2). The profit threshold for N contracts is Δ × N × (N - 1) / 2.

• Delta: A smaller delta makes the tier increase after less cumulative profit; a larger delta slows the increase.
• Profit threshold: Required cumulative profit for N contracts is delta × N × (N - 1) / 2.
• No risk %: Unlike percent-risk methods, fixed ratio does not use stop loss or risk per trade; it uses only cumulative profit and delta.

Why Fixed Ratio Matters for Traders

Fixed Ratio ties its formula tier to realized performance. That makes the scaling rule auditable, but it does not establish that the resulting size is safe for a particular account or contract.

• Discipline: Clear rules for when to add contracts.
• Controlled growth: Position size increases in steps controlled by delta, not linearly with account size.
• Drawdowns: If cumulative closed profit falls, the formula tier can fall. The method still needs a separate rule for per-trade risk and leverage.

Fixed Ratio vs Other Position Sizing Methods

Fixed Ratio is different from fixed fractional sizing. It ignores stop distance and risk per trade, while fixed fractional sizing uses account equity and the amount at risk if a stop is reached. A trader must still apply margin, leverage, liquidity, loss-limit, and instrument-specific constraints to the formula result.

Source and Related Position-Sizing Concepts

The formula and tier examples are documented in Adaptrade's position-sizing paper. For a volatility-based stop concept, read the Elder SafeZone Stop guide.

Frequently Asked Questions