Position Size Calculator
Size every trade to your risk, not your emotions. Enter your account size, the percentage you are willing to risk, your entry and your stop-loss to get the exact position size.
What the position size calculator does
Ask any experienced trader what keeps them in the game and the answer is rarely "good entries" — it is risk management, and position sizing is its foundation. This tool removes the guesswork. Tell it your account size, the percentage you will risk on a trade, your entry price and your stop-loss, and it calculates the exact number of units to trade so that, if your stop is hit, you lose precisely the amount you planned — no more. Add a take-profit to see your risk-to-reward ratio, and leverage to see the margin needed.
How to use the position size calculator (step by step)
- Choose long or short depending on your trade direction.
- Enter your account size — your total trading capital.
- Enter the percentage you will risk per trade — many traders use 1%–2%.
- Enter your entry price and your stop-loss price.
- (Optional) Add a take-profit for risk-to-reward, and leverage for margin.
- Read the result — position size, risk amount, position value, margin and risk-to-reward update instantly.
How position sizing is calculated
The maths is simple but powerful, and it always works backwards from the loss you are prepared to accept:
Notice what this does: your stop-loss distance determines your size. A tight stop lets you take a larger position for the same risk; a wide stop forces a smaller one. You never pick a size first and hope — you let your risk decide it.
Worked examples
| Scenario | Long example | Short example |
|---|---|---|
| Account size | $10,000 | $10,000 |
| Risk per trade | 1% = $100 | 1% = $100 |
| Entry price | $100 | $100 |
| Stop-loss | $95 (below) | $104 (above) |
| Risk per unit | $5 | $4 |
| Position size | 20 units | 25 units |
| Position value | $2,000 | $2,500 |
| Max loss if stopped | Exactly $100 | Exactly $100 |
Risk-to-reward, and why 1:2 is a common minimum
If you add a take-profit, the tool shows your risk-to-reward ratio — the potential gain divided by the amount risked. Risk $5 to make $15 and that is 1:3. Why does this matter? Because a favourable ratio lets you be profitable even when most trades lose:
| Risk-to-reward | Win rate needed to break even |
|---|---|
| 1:1 | 50% |
| 1:2 | ~33% |
| 1:3 | 25% |
Leverage and margin — size to the stop, not the leverage
The 1–2% rule and surviving losing streaks
Most accounts are not destroyed by being wrong occasionally — they are destroyed by being wrong with too large a position. Risking a small, fixed percentage per trade means a string of losses dents your account rather than ending it. Risk 2% per trade and even five losses in a row costs about 10%; risk 20% and two losses halve your account. Consistent small risk is what lets a strategy's edge play out over many trades.
Common mistakes to avoid
- Picking size first. Always start from the loss you will accept, then derive the size.
- Moving the stop to fit a bigger position. The stop should reflect the chart, not your greed.
- Confusing margin with risk. Low margin does not mean low risk — your stop sets your risk.
- Risking too much per trade. Large per-trade risk turns a normal losing streak into a blow-up.
Key terms
- Position size
- The number of units (or contracts) you trade.
- Stop-loss
- A predefined exit price that caps your loss on a trade.
- Risk per unit
- The price distance between your entry and your stop-loss.
- Risk-to-reward
- Potential profit divided by the amount risked (e.g. 1:3).
- Margin
- The capital required to open a leveraged position.
- Liquidation
- Forced closure of a leveraged position when losses exhaust your margin.
Tips
- Decide your stop from the chart first, then let the tool size the trade.
- Keep per-trade risk small and consistent so one bad run cannot end your account.
- Favour setups with a risk-to-reward of at least 1:2.
- Once your downside is defined, model the upside with our profit calculator.
Frequently asked questions
Why does position sizing matter?
It caps how much you can lose on any single trade, which is the foundation of risk management.
What risk % should I use?
Many traders risk 1–2% per trade, but this is personal — not advice.
How do I calculate position size for a trade?
Divide the amount you are willing to risk (account size × risk %) by your risk per unit (the distance between your entry and your stop-loss). The calculator does this automatically and also shows position value, margin and risk-to-reward.
What is the 1% (or 2%) risk rule?
It means risking no more than 1%–2% of your account on any single trade. Capping per-trade risk this way lets you survive inevitable losing streaks, since even several losses in a row only dent the account rather than ending it. The right figure is personal — this is not financial advice.
Why should my stop-loss decide my position size?
Because your stop defines your maximum loss per unit. Working backwards from a fixed risk amount and your stop distance gives the exact size that keeps the loss within plan. Choosing size first and hoping is how accounts blow up.
What is a good risk-to-reward ratio?
Many traders treat 1:2 — risking one to make two — as a minimum, because it can be profitable even with a sub-50% win rate. At 1:3 you only need to win a quarter of the time to break even. Add a take-profit and the tool calculates the ratio for you.
Does leverage increase my risk?
No — leverage lowers the margin needed to open a position, but your stop-loss still sets your maximum loss. The risk is behavioural: using leverage to justify an oversized position. Always size to your stop, not to the leverage available.
What is the difference between margin and risk?
Margin is the capital required to open a leveraged position; risk is how much you actually lose if your stop is hit. They are not the same — a small margin can still carry a large risk if your position is oversized.
How does position sizing differ for a short trade?
The logic is identical, but your stop-loss sits above your entry instead of below. Risk per unit is still the absolute distance between entry and stop, and the formula gives your size the same way.
Can I lose more than my planned risk amount?
With a guaranteed stop, your loss is the planned amount. In fast or gapping markets, slippage can push the actual fill slightly past your stop, and excessive leverage can cause liquidation first — both reasons to size conservatively.
How does take-profit factor into the calculation?
If you enter a take-profit price, the tool measures the distance from entry to target, compares it with your risk per unit, and reports the risk-to-reward ratio so you can judge whether the trade is worth taking.
Can I use this position size calculator for stocks or forex?
Yes. The formula is market-agnostic — enter your entry and stop prices for any instrument and it returns the correct size. Only the units differ (shares, lots or coins).
What happens to my position size if I widen my stop?
A wider stop means more risk per unit, so for the same risk amount your position size gets smaller. A tighter stop allows a larger position for the same risk. The tool recalculates instantly as you adjust the stop.
Is position sizing really more important than entries?
Many professionals argue it is. A great entry with reckless sizing can still ruin an account, while disciplined sizing lets an average strategy survive long enough for its edge to show. It is the core of staying in the game.