Position Size Calculator
The Position Size Calculator tells you exactly how many shares or units to trade so a single loss costs only the amount you decide in advance. Enter your account size, the percentage you are willing to risk, and your stop-loss distance, and the calculator turns those three numbers into one clear trade size. Use it before every trade to keep your risk consistent.
Position size
Decide how much to buy so one trade risks only the amount you choose.
FAQs
What risk percentage should I use per trade?
Most traders use 1% to 2% of their account value per trade. Lower percentages protect you during losing streaks, which are normal even for good strategies. Start at 1% until you have a track record you trust.
Does a wider stop-loss change my position size?
Yes. Position size equals your risk amount divided by the stop-loss distance, so a wider stop means a smaller position. This is the point of the calculation: the dollar risk stays the same no matter where you place your stop.
How it works
Position sizing is the step most new traders skip. They pick an asset they like, guess how much to buy, and end up risking far more on some trades than others. The result is that one bad trade can wipe out several good ones. Sizing each position to a fixed risk amount keeps every trade on equal footing.
The calculator works in two steps. First, it finds your risk amount: your account size multiplied by your risk percentage. Second, it divides that risk amount by the distance between your entry price and your stop-loss, which gives the number of shares or units to buy.
Worked example: with a $25,000 account and a 1% risk per trade, your risk amount is $250. If you plan to enter at $50 and set a stop-loss at $48, each share risks $2. Divide $250 by $2 and you get 125 shares. If the stop is hit, you lose 125 x $2 = $250, exactly 1% of your account.
A second example: with a $5,000 account and 2% risk ($100), an entry at $200 and a stop at $190 means $10 of risk per share, so your position size is 10 shares. Notice that the wider the stop-loss, the smaller the position has to be to keep the same dollar risk.
As a rule, most traders risk between 1% and 2% of their account on any single trade. Recalculate the size whenever your account balance changes, because the same percentage is worth a different number of dollars.
Why Position Size Matters More Than Picking Winners
Two traders can buy the same asset at the same price and get completely different results. The difference is often position size: one risks 1% of the account and takes the loss calmly, the other risks 20% and panics out. Your edge in trading comes as much from how much you risk as from what you pick.
Fixed-percentage position sizing makes your risk boring and predictable. A losing streak of ten trades at 1% risk costs about 10% of your account; the same streak at 10% risk nearly wipes you out. The calculator exists so this decision is automatic, not emotional.
The Position Size Formula, Explained
The formula is simple: shares to buy = (account size x risk %) / (entry price - stop-loss price). Everything else on the calculator is just arithmetic around this one line. The numerator is your dollar risk budget; the denominator is the risk per share.
For example, a $10,000 account at 2% risk gives a $200 budget. With entry at $40 and stop at $38, each share risks $2, so the answer is 100 shares. If the price hits your stop, the loss is $200 no matter how confident you felt about the trade.
Common Position Sizing Mistakes
The most common mistake is sizing by gut feel or round numbers, like always buying 100 shares. Round numbers ignore both your account size and your stop distance, so the risk drifts trade to trade. Another mistake is confusing position size with conviction: buying more because a trade feels certain just concentrates your risk.
A subtler mistake is forgetting that fees and slippage add to the loss. If your broker charges $5 per side, a $250 risk budget really becomes $240 of price risk plus $10 of costs. Subtract your round-trip fees from the risk amount before dividing, and your real risk will match the plan.