Futures provide direct exposure and leverage, so the position needs a clear loss boundary. A small market move can create a meaningful change in account equity.
Understand the contract exposure
Check the current lot size, contract value, expiry and margin before planning the trade. Margin is not the same as maximum risk, and requirements may change with market conditions.
Build the scenario before execution
Define the market structure, entry condition, stop distance and maximum rupee risk. Also note major scheduled events that can cause gaps or rapid volatility.
- Contract and lot size
- Liquidity and spread
- Entry and invalidation
- Maximum rupee risk
- Event and overnight-gap risk
Review the trade as a process
After the position is closed, compare the execution with the original plan. Process review is more useful than judging quality only by profit or loss.