Position Size Calculator
Risk a fixed slice of your account per trade. Enter your entry and stop, get your exact share count.
Business tools · Free
About the Position Size Calculator
Position sizing is the least exciting skill in trading and the one that keeps you alive. Traders who blow up often don't have bad theses — they have bad sizes. One oversized position that stops out can wipe out months of disciplined wins. This calculator turns your risk rules into an exact share count.
Enter your account size, the percentage you're willing to lose on a single trade, your entry price, and your stop price. The tool tells you how many shares to buy so that if your stop triggers, you lose only what you planned — and no more.
Why many traders cap risk at 0.5-2% per trade. At 1% risk, a brutal ten-loss streak costs you under 10% of your account — annoying, recoverable. At 10% risk, the same streak is a 65% drawdown that needs roughly a 187% gain to undo. Survival is a maths problem, not a willpower one.
Your stop defines your size, not your conviction. A tighter stop lets you buy more shares for the same risk; a wider stop means fewer shares. Conviction never enters the equation — that's how you keep "high-conviction" positions from becoming account-ending ones.
Risk is fixed in dollars, not shares. Decide the dollar amount you'll lose if you're wrong, then let the distance to your stop determine the share count. This is the entire method. Stops aren't guaranteed — gaps and slippage can fill you below your stop, so a real loss can exceed the plan. This is general education, not investment advice.
How to use it
- Enter your account size. The total capital you trade with.
- Set your per-trade risk. Most traders use 0.5-2% of the account.
- Enter your entry price. Where you plan to buy.
- Enter your stop-loss price. Where you exit if the trade goes wrong.
- Read your share count. The position size that keeps a single loss survivable.
- Check the R-multiples. What a 2R and 3R winner would pay you.
Frequently asked questions
How does the position size calculator work out how many shares to buy?
It multiplies your account size by your risk percentage to get dollar risk, divides by the distance between entry and stop, and rounds down to whole shares. With the defaults ($25,000 account, 1% risk, $50 entry, $47 stop) you risk $250 at $3 a share, which is 83 shares, a $4,150 position or 16.6% of the account.
Why might my real loss differ from the dollar risk in the position size calculator?
Because shares are rounded down, your planned loss at the stop is slightly under the target (83 × $3 = $249 in the default example). In live markets a stop can fill worse than its price when the stock gaps or moves fast (slippage), and commissions aren't included, so actual losses can exceed the planned amount.
Can I use the position size calculator for a short trade?
Yes. It uses the absolute distance between entry and stop, so a stop above your entry for a short gives the same share count logic. It does not account for borrowing costs, margin requirements or short-sale restrictions, so check those with your broker.
What do the 2R and 3R numbers mean in the position size calculator?
R is the amount you risk on the trade, so a 2R winner earns twice your risk and a 3R winner three times. The tool calculates them as shares × risk per share × 2 or 3: $498 and $747 in the default example, which corresponds to the stock reaching $56 or $59 from a $50 entry.
Can the position size calculator suggest a position larger than my account?
Yes. A very tight stop can produce a share count whose value exceeds your account, which would require margin. Check the position value and '% of the account' line, and reduce the size if it breaks your buying power or your own concentration limit.
What risk per trade should I use in the position size calculator?
The tool's hint is 0.5–2% per trade, which is common practice among active traders. Ten losses in a row at 1% (recalculated on the shrinking balance) cost about 9.6% of the account, versus about 18.3% at 2%. This is general education, not investment advice.
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