Position Size Calculator

Position sizing decides how much you lose when a trade fails. Enter your account balance, the percentage you are willing to risk, and your entry and stop-loss prices. The calculator returns how many units to buy or sell.

The formula

Position size = (Account balance × Risk %) ÷ |Entry price − Stop-loss price|

The amount at risk is a fixed dollar figure. The distance to your stop-loss is the loss per unit. Dividing one by the other gives the number of units that keeps the loss at your chosen amount.

Worked example

• Account balance: $10,000
• Risk per trade: 1% → $100 at risk
• Entry: $50, stop-loss: $48 → $2 risk per share

Position size = $100 ÷ $2 = 50 shares, a position value of $2,500. If the stop-loss is hit, you lose about $100, which is 1% of the account. If the target is $56, the reward is $300, a risk/reward of 1:3.

Why fixed-percentage risk works

Sizing by feel leads to big losses on trades you were most confident about. A fixed percentage keeps every loss small and survivable. A common rule of thumb is to risk 1% to 2% per trade or less. The right figure depends on your strategy and how much drawdown you can tolerate.

Common mistakes

• Moving the stop after sizing. A wider stop with the same size increases your real risk. Recalculate first.
• Ignoring fees and slippage. Fast markets can fill you past your stop. Allow a margin.
• Confusing position value with risk. A $2,500 position does not mean $2,500 at risk. The stop-loss distance determines the risk.
• Using leverage as a size guide. Leverage sets your maximum position, not the position you should take.

Forex and crypto notes

For forex, divide units by 100,000 to get standard lots (10,000 for mini lots, 1,000 for micro lots). For pairs quoted in a different currency from your account, convert the risk amount first. For crypto, fractional units are fine; the calculator shows up to four decimals.

FAQ

How much of my account should I risk per trade? Many traders keep it between 0.5% and 2%. Smaller accounts and less proven strategies usually call for the lower end.

Does this work for shorts? Yes. The calculator uses the distance between entry and stop, so the direction does not change the size.

Can position value exceed my account balance? Only with leverage. If the value shown is larger than your balance, check that your broker allows that margin and that you are comfortable with it.

Related tools: Risk/Reward Calculator · Drawdown Recovery Calculator · All trading tools

Educational use only. Not financial advice.