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Position Sizing Calculator

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Enter your account size, risk percentage, and entry/stop-loss prices to find how large a position to take.

Position Sizing Calculator

Live
Position size
33 shares
Amount at risk
$100.00
Position value
$1,650.00
This limits your risk per trade to a set percentage of your account - it doesn't predict whether the trade will be profitable.

The formula

Amount at risk = Account size x Risk % per trade Risk per share = |Entry price - Stop-loss price| Position size = Amount at risk / Risk per share
Example

A $10,000 account risking 1% per trade, entering at $50 with a stop at $47: risk amount = $100, risk per share = $3, position size = 100 / 3 ≈ 33 shares.

Step-by-step guide

  1. Enter your total account size.
  2. Enter the percentage of your account you're willing to risk on this single trade.
  3. Enter your planned entry price and stop-loss price.

Why this calculation is about risk management, not prediction

Position sizing doesn't tell you whether a trade will work out - it answers a completely different question: "if this trade goes wrong and hits my stop-loss, how much am I actually willing to lose?" By fixing that risk amount as a small, consistent percentage of the account (commonly 1-2% among risk-conscious traders) rather than letting position size grow arbitrarily, a string of losing trades becomes survivable instead of account-ending. This is a defensive, capital-preservation tool - it works the same way regardless of whether you turn out to be right or wrong about the trade's direction.

Common mistakes

Risking a large percentage per trade (5-10%+) - even a skilled trader with a good track record can face a losing streak, and high per-trade risk compounds losses quickly.
Moving the stop-loss further away after entering a losing trade to "give it more room" - this defeats the purpose of position sizing, since the actual risk taken no longer matches what was planned.

Frequently asked questions

What risk percentage do most risk-conscious traders use?

1-2% per trade is commonly cited in risk management literature - this isn't a strict rule, but it reflects the idea that surviving a losing streak matters more than maximizing any single trade's size.

Does this account for trading fees or slippage?

No - this is a simplified risk-based sizing model. Real fills can differ slightly from your planned entry and stop prices, and fees reduce net results further.

Can I use this for any market, not just stocks?

Yes - the underlying math (risk amount divided by risk per unit) applies the same way to any market where you can define an entry price and a stop-loss price.

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