Position size calculator

How position sizing works

Position sizing answers one question: how much can you buy so that, if your stop-loss is hit, you lose only what you planned to lose. It is the core of risk management. Traders who blow up accounts rarely do so because of bad entries. They do so because their positions were too large for their stops.

Example with the default values above: a $10,000 account risking 1% gives a risk budget of $100. With an entry at $100 and a stop at $95, each share carries $5 of risk. $100 divided by $5 equals 20 shares. If the stop is hit, the loss is $100, exactly the planned 1%.

Why risk 1% per trade?

The 1% rule keeps a losing streak survivable. Ten consecutive losses at 1% leave you with about 90% of your capital, which is recoverable. The same streak at 5% per trade leaves you near 60%, and you now need a 67% gain just to get back to break-even. Most professional traders size between 0.5% and 2% per trade.

Does this work for forex and futures?

Yes, the logic is identical. For forex, the result is a number of currency units: divide by the lot size to get lots (100,000 units for a standard lot, 10,000 for a mini, 1,000 for a micro). For futures, divide your risk budget by the risk per contract (ticks to your stop multiplied by the tick value) and round down to whole contracts.

Should I round the result?

Always round down, never up. If the calculator says 20.8 shares, buy 20. Rounding up puts more money at risk than you planned, which defeats the purpose of the calculation.

What about leverage?

Leverage does not change the calculation. The position size is determined by your risk budget and stop distance, not by your buying power. Leverage only determines whether you can afford to open the position the formula gives you. If the position value exceeds your buying power, reduce the trade or skip it.