Position Size Calculator

How to Use

Enter your total account size, the percentage of it you're willing to risk on this trade, and your planned entry and stop loss prices. The calculator finds your risk amount (account size times risk %), then divides it by the risk per share (entry minus stop loss) to give the number of shares to buy, updating live as you type. Position Value shows the total capital that specific share count would tie up, worth checking against your actual available capital before placing the trade.

Position Sizing Answers a Different Question Than Risk-Reward Ratio

Risk-reward ratio (covered by this site's own Risk Reward Calculator) asks whether a trade's potential payoff structure is favorable. Position sizing asks something entirely different, and just as important for long-term survival: given that a trade could lose money, exactly how many shares can be bought without risking more of the account than intended if the stop loss is hit. A trade can have a fantastic risk-reward ratio and still blow up an account if it's sized far too large relative to available capital, position sizing is the discipline that keeps any single trade's potential damage bounded and controlled.

Worked Example: From Risk Percentage to Share Count

Using this tool's own defaults, an account size of 1,000,000, a risk of 1% per trade, an entry price of 100, and a stop loss at 95. Risk amount is the account size times the risk percentage: 1,000,000 × 1% = 10,000, the maximum currency amount this trade is allowed to lose. Risk per share is the distance from entry to stop: |100 − 95| = 5. Dividing the risk amount by the risk per share gives the position size: 10,000 ÷ 5 = 2,000 shares. Position value, the total capital this trade ties up, is 2,000 × 100 = 200,000, meaning this 2,000-share position uses 20% of the account's total capital while still risking only the intended 1% if the stop loss is hit.

Why Risk Percentage, Not Position Value, Should Drive the Sizing Decision

It's tempting to size a trade by deciding "I'll put 200,000 into this," a position-value-first approach, but that method says nothing about actual risk exposure until the stop loss distance is also known. The same 200,000 position could risk 1% of the account with a tight stop, or several times that with a wide one, position value alone doesn't reveal which. Working backward from a fixed risk percentage instead, as this calculator does, keeps the actual dollar amount at risk consistent and intentional across every trade, regardless of how differently priced, volatile, or tightly-stopped each individual position happens to be.

The Compounding Danger of Oversized Positions

Risking too much per trade doesn't just risk one bad trade, it risks the mathematical ability to recover from a losing streak at all. A 50% account loss requires a 100% gain just to get back to even, a much harder bar to clear than the loss that created it. Keeping risk per trade small, commonly cited guidelines suggest 1-2%, means even a run of several consecutive losing trades only dents the account modestly, preserving both the capital and the composure needed to keep trading through a rough stretch rather than being forced out of the game by a single oversized position going wrong.

Frequently Asked Questions

How much of my account should I risk per trade?

A common guideline is risking 1-2% of your account on any single trade, so that a string of losses doesn't seriously damage your capital. Risking more than that on one trade can require an unrealistic win rate just to stay even after a few losses.

How does position size relate to my stop loss?

A wider stop loss (more distance from entry) means each share risks more, so you buy fewer shares to keep total risk fixed at your chosen percentage. A tighter stop loss lets you buy more shares for the same dollar risk.

Why does this calculator focus on risk percentage instead of just position value?

Because position value alone doesn't tell you how much you'd actually lose if the stop loss is hit, that depends on both the position size and how far the stop sits from entry. A large position with a tight stop can risk less real money than a small position with a wide stop. Sizing directly from a fixed risk percentage keeps the actual dollar amount at risk consistent and deliberate across every trade, regardless of how differently priced or volatile each individual stock happens to be.

Why do two trades with the same risk percentage end up with different position sizes?

Because position size depends on the risk per share (the distance between entry and stop loss), not just the risk percentage. A trade with a tight stop close to entry has a small risk per share, so the same fixed risk amount buys many more shares. A trade with a wide stop far from entry has a large risk per share, so the same risk amount buys far fewer shares. Both trades still risk the identical amount of account capital if the stop is hit, just distributed across a different number of shares.

What happens if the calculated position value is larger than my account size?

This can happen with a very tight stop loss relative to entry price, since a small risk-per-share figure can produce a large share count even at a modest risk percentage. If the resulting position value exceeds available capital (or available margin), the trade isn't actually executable as sized, in that situation either the stop needs to be widened, the risk percentage reduced, or the position capped at whatever capital is actually available, whichever keeps both the risk amount and the position value within realistic account limits.

Should account size mean my total portfolio or just the capital allocated to this specific trade?

Most position-sizing frameworks use total tradeable account capital, not just capital earmarked for one trade, since the whole point of a fixed risk percentage is capping how much of your overall capital any single trade can damage. Using a smaller sub-allocation as the base number understates true portfolio-level risk if you're running multiple concurrent positions each sized against their own separate sub-account rather than the same shared total.