Calculator walkthrough: from inputs to a decision
The calculator answers an arithmetic question: what exposure follows from the inputs? It cannot decide whether the entry or stop is sensible. Begin with the instrument specification, then enter prices in the quote currency rather than converting only one input into your account currency.
For the hypothetical long in the original example, a ten-tonne multiplier means each one-dollar-per-tonne movement changes the gross result by ten dollars per contract. The multiplier is not the margin requirement. A broker can require a deposit that differs substantially from either the planned stop loss or the full notional exposure.
| Original example, one contract | Calculation | Result |
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| Notional exposure | 5,500 × 10 | $55,000 |
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| Estimated loss at assumed stop | (5,500 − 5,450) × 10 | $500 |
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| Gross profit at scenario exit | (5,600 − 5,500) × 10 | $1,000 |
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| Gross reward divided by stop risk | 1,000 ÷ 500 | 2 |
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These are scenario calculations, not a probability of winning. A nominal two-to-one ratio does not account for how often the target or stop is reached.
Why the maximum size May need reducing
A $1,000 budget divided by $500 estimated risk gives two contracts before costs. If the intended planning allowance becomes $550 per contract after estimated execution costs, only one whole contract fits: two would imply $1,100. This allowance is illustrative, not a forecast of actual slippage.
Round down to the permitted trading increment. If no whole exchange contract fits, the calculation does not become safe by rounding up. A broker product with a smaller increment requires its own verified multiplier and terms.
What if the stop is on the wrong side?
For a conventional protective stop, a long's stop assumption sits below entry and a short's above entry. A result from inconsistent inputs should prompt a review, not an attempt to make the numbers fit the desired size.
What if price gaps through the stop? The realised loss can exceed the assumed calculation. What if the account is in sterling? The dollar result also needs an appropriate conversion, with potential conversion costs.
Use the calculator alongside the full risk guide. Check ICE's contract specification ↗ or the broker's own product terms before entering the multiplier.