Position Size Calculator
Position size should be derived from the distance to your stop, not chosen independently of it. Enter your account equity, the percentage you are willing to risk, your entry and your stop — this works out the size that makes a stop-out cost exactly what you intended.
Position size = (Account equity × Risk %) ÷ |Entry price − Stop price|
- Position size
- 125.00 units
- Amount at risk
- $500.00
- Risk per unit
- $4.00
- Position value
- $12,500.00
Free to use, no sign-up. Nothing you type here is sent anywhere — the calculation runs entirely in your browser.
Why sizing by share count or dollar amount fails
"I always buy 100 shares" or "I always put in $2,000" ignores the single variable that determines your downside: how far away the stop sits. A $2,000 position with a stop 2% away risks $40. The same $2,000 position with a stop 8% away risks $160 — four times the risk for identical capital deployed.
Sizing has to start from risk. Once size is a function of stop distance, every trade costs the same amount when it goes wrong, which is what makes your results comparable across trades in the first place.
A worked example
A $50,000 account risking 1% per trade gives $500 of risk. With entry at $100 and a stop at $96, the risk per share is $4. Position size is $500 ÷ $4 = 125 shares.
That 125-share position is worth $12,500 — but the number that matters is that it loses exactly $500 if the stop is hit. The position value is an output, not an input.
How much should you risk per trade?
The commonly cited 1% rule is a reasonable default rather than a law. It is a guardrail against the maths of drawdowns: losses compound on a shrinking base, so ten consecutive 1% losses leave you down about 9.6%, while ten consecutive 5% losses leave you down over 40% — needing a 67% gain just to get back to even.
Most discretionary traders sit somewhere between 0.5% and 2%. Newer traders, and anyone whose strategy has not been backtested and forward-tested, belong at the conservative end until they have real data on their own expectancy.
Frequently asked questions
How do you calculate position size?
Position size = (account equity × risk % per trade) ÷ risk per share, where risk per share is the absolute distance between your entry price and your stop price. On a $50,000 account risking 1%, with entry at $100 and a stop at $96, that is $500 ÷ $4 = 125 shares.
What is the 1% rule in trading?
Risk no more than 1% of account equity on any single trade. It is a conservative starting point, not a magic number — the right figure depends on your strategy's win rate, your risk tolerance, and how correlated your open positions are with each other.
Does this work for forex and futures?
The formula is the same for any instrument: risk budget divided by per-unit risk. For forex, substitute pip value for price distance; for futures, use the tick value of your contract. The calculator works in price terms, so convert your stop distance into the same units as your entry.
Should position size change after a losing streak?
It changes automatically if you size off current equity rather than your starting balance — a smaller account produces a smaller position for the same risk percentage. That built-in de-risking is a large part of why percentage-based sizing survives drawdowns.