RISK MANAGEMENT
Position Size Calculator
Decide how much to risk before you decide how much to buy. Enter your account size, the percentage you're willing to lose, and where your entry and stop sit — the right size falls out.
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THE MATH
Size from the stop, not from a feeling
Position sizing is the one decision that keeps a losing streak survivable. The formula divides the dollars you can afford to lose by the loss per share if your stop is hit.
position size = (account × risk %) ÷ |entry − stop|Fixing risk at a small, constant fraction of the account — most traders use 0.5–2% — means ten losses in a row dents the account instead of ending it, and it makes every trade comparable in your journal: each one risked the same “1R.”
A wider stop automatically means a smaller position; a tighter stop lets you size up without risking more. The output works the same for shares, contracts, coins, or lots — for futures, multiply the per-point risk by the contract’s point value first (or use the futures calculator, which knows the specs).
POSITION SIZE CALCULATOR
LivePOSITION SIZE
100
shares · units · contracts
DOLLARS AT RISK
$250.00
1% of account
WORKED EXAMPLE
A $25,000 account risking 1%
Say you trade a $25,000 account and cap risk at 1% per trade — $250. You want to buy at $231.40 with a stop at $228.90.
The distance from entry to stop is $2.50 per share. Divide the $250 you’re willing to lose by $2.50 and the position is exactly 100 shares — about $23,140 of stock. If the stop is hit you lose $250, precisely the 1% you planned. Notice what happens if you tighten the stop to $230.15 ($1.25 of risk): the same $250 now buys 200 shares. Same risk, twice the exposure — that’s the whole trade-off the formula manages for you.
What it prevents matters more than what it computes. Traders who size by gut feel systematically bet bigger after losses — exactly when their judgment is worst. A fixed-fraction rule makes that drift impossible, and it’s the reason funded and professional traders treat sizing as non-negotiable while entries stay discretionary.
IN PRACTICE
Run it before every entry, not after
The calculation takes five seconds and belongs in the moment between spotting a setup and clicking buy.
The order of operations is the discipline: pick the stop from the chart first (below the level that invalidates the idea), then let the formula pick the size. Doing it backwards — choosing a size and then finding a stop that “fits” — is how stops end up in noise and get hunted. If the computed size rounds down to zero, the trade is telling you the stop is too wide for your account. Skip it or find a better entry; don’t widen the risk.
FAQ
What percentage of my account should I risk per trade?＋
Most professional guidance lands between 0.5% and 2% per trade. At 1%, a brutal 10-loss streak costs about 9.6% of the account — recoverable. At 5% the same streak costs 40%, which needs a 67% gain just to get back to even. Newer traders should start at the low end until their stats justify more.
Does this work for futures, forex, and crypto?＋
Yes — the formula is universal. For stocks and crypto the output is shares or coins. For forex, use pip distance and pip value to convert. For futures, divide your dollar risk by (points of stop distance × the contract's point value); our futures calculator has the tick and point values built in for 30+ contracts.
What if the position value is bigger than my account?＋
That happens with tight stops and it's normal in leveraged markets — a $25,000 account risking $250 with a $0.50 stop implies 500 shares ($100k+ of stock). Whether you can take it depends on your margin, but the risk math is unchanged: you're still only exposed to $250 if the stop holds. If you can't get the full size, take less — never widen the stop to shrink the notional.
Should I round the position size up or down?＋
Always down. Rounding up risks more than you planned; rounding down risks slightly less. If your broker supports fractional shares you can take the exact figure.
Why size from the stop instead of using a fixed number of shares?＋
A fixed share count means your real dollar risk swings wildly with each setup's stop distance — 100 shares with a $5 stop risks ten times more than with a $0.50 stop. Sizing from the stop holds risk constant, which is what makes results comparable and expectancy math meaningful.
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