AFT8 Risk Management Position Sizing Introduction
Position sizing is fundamentally a risk-management technique—though it’s often grouped under the broader umbrella of money management—because it determines how much capital is exposed to the market on each trade. In AFT8, static position sizing sets a fixed number of contracts (Lots) regardless of market conditions, whereas dynamic position sizing uses a fixed-fractional method to adjust the number of contracts based on factors like volatility, account equity, or predefined risk parameters.
Why use dynamic position sizing instead of a static lot size? Instruments differ in point/tick value or volatility, so—for example—3 lots on NQ might equate to 12 lots on RTY to achieve the same trade-risk exposure. To maintain equal weighting when trading multiple instruments, lot size must be adjusted so that each trade carries the same risk in cash or as a percentage of trade-risk capital. By tracking volatility, a system can maintain a constant risk per trade: position size decreases when volatility is high and increases when volatility is low.
Ways to Change Position Size with AFT8
It’s very easy to view, edit, set, change, and configure position size and risk management within AFT8 after some exploration. Settings can be configured and saved along with workspaces.
- NinjaTrader 8: Use Chart Trader, Order Ticket, or DOM to set the quantity for manual entries. This is static position sizing and can be adjusted at any time—up or down in real-time.
- AFT8 Algo Trade Entry Module: In the Market Analyzer column parameters for the Algo Entry Module, you can define static or fixed-fractional position sizing. Templates can be viewed, edited, and saved under a unique name, usually for set and forget settings.
- AFT8 Algo Trade Entry Controller: The pop-up controller can be configured for static, fixed lots per trade or to leverage advanced risk-management features such as fixed-fractional sizing and institutional money-management patterns like fund-of-funds for trading with asset streams. Settings can be changed in real-time on the fly.
Note: Turnkey Workspaces 1 provides only the Trade Manager module, so quantity is configured via the NinjaTrader components. From Turnkey Workspace 2 onward, the Algo Entry Module/Controller allows quantity to be set and saved directly in the AFT8 settings.
TIP: Remember to save your settings templates and workspace under a unique name to prevent losing changes during updates!
1. NinjaTrader 8 Trade Size Quantity
NinjaTrader provides static position sizing via order quantity in its trading components. Within AFT turnkey workspaces, it’s easy to change the quantity on Chart Trader or use any other preferred NinjaTrader trade submission component—such as Order Ticket or DOM.
2. AFT8 Algo Trade Entry Module Position Size
Within AFT turnkey workspaces 2 or above, locate the NT8 Market Analyzer. Right-click to display the pop-up menu, click “Columns,” and the Columns dialog form will appear. Select “AFT Algo” from the bottom-left list, then view the properties on the top-right. Scroll down to find the “Trade system position sizing” group of parameters. Hover over each property name to read its description.
Note: Make sure to uncheck “Position ATS Controller Mode On” to enable position sizing according to the AFT Algo settings. Any edits you make must be saved in “Templates,” or they will be reset when the AFT Algo starts and reads the settings file.
Configure Static Lot Size – Fixed Trade Quantity
Set “Position mode:0,” turn “ATS Controller Mode On”: off, and enter the desired lot size in “Set Position Size.” In the example above, it’s set to 2; change this to 3, then save the template and workspace under your unique name.
TIP!
- Save your settings as a new name or one different from the turnkey default name and also save the workspace to prevent losing changes during updates
- Make sure to set the Algo Entry Controller Quantity control to Off in menu 'Size.Adv' and save the template there too in menu 'Settings'! If you do not do this, the Algo Entry Controller will override your settings in the Algo Trade Entry module. Even if the state Q.On was all off - toggle it on off and save to force a template refresh and save!
Configure Fixed Fractional Position Sizing – Dynamic Trade Quantity
Set “Position mode:1,” turn “ATS Controller Mode On”: off, ignore “Position Size.”
Set PositionSizeRiskDailyFibGridRatio=0.1 for 10% typical for scalper mode or 0.2 for 20% typical for daily session breakout mode trading. Set the Account size to your desired size or use the actual account balance with AccountsizeMode=0 or 1. PositionSizePercent 0.01 is 1% risk per trade based on the volatility defined in PositionSizeRiskDailyFibGridRatio (acting as the proposed volatility stop size) to calculate the actual lots.
TIP!
- Save your settings as a new name or one different from the turnkey default name and also save the workspace to prevent losing changes during updates
- Make sure to set the Algo Entry Controller Quantity control to Off in menu 'Size.Adv' and save the template there too in menu 'Settings'! If you do not do this, the Algo Entry Controller will override your settings in the Algo Trade Entry module. Even if the state Q.On was all off - toggle it on off and save to force a template refresh and save!
3. AFT8 Algo Entry Controller Position Size
Bypass override configured settings in the AFT Algo Templates set 'ATS Controller Mode On' checked! Save the template with a unique name and the workspace! So the setting is valid/recalled on a restart etc.
Algo Controller Default view
Algo Controller Static Fixed Lots per Trade
Uncheck the options to clear the grid view - check Size and Size.Adv to view the static lots. Note: Q.On is checked for all, this means the controller is controlling the trade size quantity. Dynamic (dyn.) is unchecked, NoC is irrelevant for static lots.
Write the lot size in each row as desired if different for each instrument system/asset stream or use them all the same size as preferred.
Click the Settings menu top left to view the controller templates section, click save to save this system/account/instrument combination.
Algo Controller Dynamic Volatility Fixed Fraction Size Lots Per Trade
Uncheck all options to clear the view and check 'Size', 'Size.Adv', 'Cap.$', 'Risk' for a more in-depth view in order to view the options and set the system to match your risk management rules. Set Dynamic (Dyn.):on, note the Qty column is updated with the lot size.
Change the Risk Capital Allocation to increase/decrease lots
Note: Click the 'Alloc $' button to wheel through cash allocation presets ranges 25K to 250K are typical for day trading. Eminis Swing 250K to 1.5mil are more usual.
Change the Stop Loss Volatility % to increase/decrease lots
SL Vol %: 10% is typical for scalper style and 20% to 25% is typical for session breakout. Note: Click the 'SL Vol %' button to wheel through 'SL Vol %' presets ranges 5 to 25 are typical 10 to 20 the most widely used.
Change the Risk % to increase/decrease lots
Default setting is 1% - here we changed to 2% and you can see more lots = more risk the total shown far right approx. $500 USD based on 25K USD and 2%. Note: Click the 'Risk %' button to wheel through risk % presets or enter in each cell/asset stream.
Balance Cash Allocation to Lot Size
This feature is rarely used but is useful to see how much cash is required for an asset stream to trade with the set risk and volatility stop loss setting. It will normalize the lots across all rows and recalculate the cash allocation required. Answering the question how much do I need to trade this system on this instrument?
Note: Click the D.Lots" button to cycle through the settings 1 to 20 lots or enter them type into the cell, cash allocation will update. To reset - manually type the cash allocation into the 'Alloc.$' cells.
Risk Advanced viewEnter max Lots as a ceiling for each instrument/asset stream or a global value to apply to all. Note the Qty is maxed out at the preset value.
TIP! Click the Settings menu top left to view the controller templates section, click save to save this system/account/instrument combination.
Quick summary of Risk and Asset Streams
If we set 50K per instrument and there are 4 instruments/asset streams and they will be trading in tandem then the risk capital allocated is 200K total spread over 4 instruments - each one has a silo of cash to accelerate or decelerate on the risk 1% is uniform. The retail trading way of doing things means you see each 50K as 50K USD total cash pot and so the % is applied as if it was one pot of money with a % applied evenly to all so the risk can be 4% with each at 1%. AFT8 caters for all possibilities and preferences.