Position size calculator

How the position size formula works

Position sizing answers one question: how many shares can I buy so that, if my stop is hit, I lose only what I planned to? It's the difference between a bad trade and a bad month.

Shares = (Account × Risk %) ÷ (Entry − Stop)

Say you have a $10,000 account and risk 1% — that's $100 you're willing to lose. You enter at $50 with a stop at $48, so your risk per share is $2. Dividing $100 by $2 gives 50 shares. If your stop were tighter, at $49, your risk per share would be $1 and you could hold 100 shares for the same $100 of risk. The trade's structure sets your size — not a gut feeling.

Why size by risk, not by dollars

Sizing by a fixed cash amount ("I always buy $2,000") means every trade risks a different amount depending on where your stop is. Sizing by risk keeps each loss roughly equal, so no single trade can define your results. That consistency is what lets a positive edge compound over time.

Want the full picture? Read Risk management 101, or try the risk/reward calculator next.

Frequently asked questions

How do you calculate position size?

Divide the amount you are willing to lose by your risk per share. Risk per share is the distance between your entry price and your stop-loss price, so the formula is (account × risk %) ÷ (entry − stop). On a $10,000 account risking 1% ($100) with a $2 gap between entry and stop, the position is 50 shares.

How much should I risk per trade?

There is no universal number, and it is a personal decision that depends on your account, your strategy and your tolerance for a losing streak. A commonly cited starting point among retail traders is 1% or less of account equity per trade, because it keeps any single loss survivable — ten consecutive losses cost roughly 10% of the account rather than ending it.

Is this position size calculator free?

Yes. It is free, requires no sign-up, and the calculation runs entirely in your browser — nothing you enter is uploaded or stored.