Position Size Calculator
Calculate exactly how many shares or contracts to trade based on your account size, stop loss level, and risk percentage. The most important calculator for any trader.
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The Calculation Behind Position Sizing
Position sizing ensures you never risk more than a predetermined amount on any single trade. Here is the formula broken down step by step.
Example Trade
You have a $10,000 account and risk 1% per trade.
Your entry price is $50.00 and your stop loss is at $48.00.
- Risk Amount: $10,000 × 1% = $100
- Risk Per Share: $50.00 − $48.00 = $2.00
- Position Size: $100 ÷ $2.00 = 50 shares
- Position Value: 50 × $50.00 = $2,500
- % of Account: $2,500 ÷ $10,000 = 25%
Use Cases for Position Sizing
Position sizing is not optional — it is the foundation of survival and consistency in trading. Here are the key scenarios where this calculator matters most.
Before Every Trade
Calculate your position size before entering any trade. This removes emotion and ensures consistent risk regardless of the setup.
Different Stop Distances
A tighter stop means you can take more shares; a wider stop means fewer shares. This calculator adjusts automatically so your dollar risk stays constant.
Scaling Your Account
As your account grows, position sizes increase proportionally. As it shrinks, they decrease. This keeps risk proportional to your current equity.
Protecting Capital
Position sizing limits the damage of any single loss. A single bad trade should never be able to take you out of the game.
Risk Considerations
Position sizing is a risk management tool, not a guarantee. Keep these important points in mind.
This calculator assumes you enter and exit at your exact price levels. In reality, slippage, gaps, and volatile markets can cause your actual risk to exceed the planned amount.
Position sizing per trade does not account for correlated positions. If you hold multiple trades in the same sector or asset class, your total portfolio risk may be much higher than intended.
Most professional traders risk between 0.5% and 2% per trade. Risking more than 2% on a single position significantly increases the chance of account drawdowns that are difficult to recover from.
This calculator is an educational tool. It does not account for commissions, fees, margin requirements, or individual financial circumstances. Always do your own research and consult a licensed financial advisor.