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Position Size Calculator
Decide what a losing trade may cost before you place it. This position size calculator turns your risk per trade and stop-loss into the exact number of shares to buy, and a target price adds dollars at risk and the risk-reward ratio.
See how this works on a risk-first trade size — 3 real examples
Shares to buy
0
Dollars at risk
$0
Position value
$0
Risk per share
$0
Risk-reward
—
Potential profit
—
Educational risk-sizing tool — not trading, investment or financial advice.
How your position size is calculated
This tool uses the risk-first method — you decide the loss you can accept, and that dictates the share count:
Risk $ = account size × risk % per trade
Risk per share = | entry − stop |
Shares = floor( Risk $ / Risk per share )
Position value = shares × entry
In percent mode your dollar risk is the account size times your risk % per trade; in fixed mode it is the amount you type. Per-share risk is the absolute distance between your entry and stop-loss, so the math works for longs and shorts alike. Shares are floored to a whole number so you never round up past your risk limit — which is why the dollars actually at risk can land a few cents under your target. With a target price we also compute potential profit = shares × |target − entry| and the risk-reward ratio = |target − entry| ÷ risk per share (your R-multiple). The tool floors nothing about your judgment: it deliberately refuses to size a trade when the entry and stop are equal, because a zero-distance stop implies infinite risk.
One $25,000 account, three sizing choices
Entry $50, target $56. What changes when the stop tightens from $47 to $48.50, and when the risk budget doubles from 1% to 2%.
The default: 1% risk, stop at $47
position size83 shares
- One percent of the account puts $250 on the line; at $3 of risk per share, 83 shares fit.
- The position is worth $4,150 — 16.6% of the account — yet only $250 of it is at risk.
- Reaching the $56 target would earn $498, twice the amount risked.
The stop distance, not the account balance, is what decides the share count.
Load this example (opens in a new tab)Same $250 risk, stop moved to $48.50
position size166 shares
- Halving the per-share risk to $1.50 lets the same $250 budget carry twice the shares.
- Position value doubles to $8,300 — a third of the account — while dollars at risk stay $250.
- The unchanged $56 target now sits four risk-units away: a 4:1 reward-to-risk ratio.
A tighter stop buys size without adding dollar risk — when the stop fits the setup.
Load this example (opens in a new tab)Doubling the risk budget instead
position size166 shares
- Two percent of the account is $500, which at $3 a share also buys 166 shares.
- Same share count as the tighter stop, but a losing trade now costs $500 instead of $250.
- The reward-to-risk ratio stays at 2:1; only the stakes have changed.
Two roads lead to 166 shares: one keeps the worst case at $250, the other doubles it.
Load this example (opens in a new tab)Illustrations only, not financial advice. Your own rate, taxes and insurance will differ — check with a qualified financial advisor before acting on any of this.
Position sizing by risk, in plain English
- Risk first, size second. Beginners pick a share count and hope; disciplined traders fix the dollars at risk, then let the stop-loss decide how many shares fit. This calculator enforces that order.
- The 1% rule keeps you in the game. Capping risk per trade at 1–2% of the account means even a long losing streak is survivable — the math of drawdowns is brutal above that.
- Your stop-loss sets the share count. A tighter stop shrinks per-share risk, so the same dollar risk buys more shares; widen the stop and the position shrinks. Set the stop on the chart, not to justify a size.
- Chase a 2:1 risk-reward or better. When potential reward is at least twice your risk, you can be wrong more often than right and still come out ahead. Add a target above to see your ratio.
- Notional isn't risk. A tight stop can make the position worth more than your cash — that's leverage, not extra danger to your capital, but confirm your broker and nerves support it.
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Frequently asked questions
How do I calculate position size from my risk?
Divide the dollars you are willing to risk by your per-share risk. Your dollar risk is your account size times your risk % per trade — a $25,000 account risking 1% is $250. Per-share risk is the distance between your entry and stop-loss — a $50 entry with a $47 stop is $3 a share. So $250 ÷ $3 = 83 shares. This position size calculator does that math and floors to whole shares so you never round up past your risk limit.
What is the 1% (or 2%) risk-per-trade rule?
It is a risk-management guideline that caps the loss on any single trade to 1–2% of your total account. On a $25,000 account, 1% means no trade should lose more than $250 if your stop is hit. Keeping risk per trade small is what lets you survive a string of losers — ten straight 1% losses only draws the account down about 10%, not to zero.
How does my stop-loss determine the number of shares?
The gap between your entry and your stop-loss price is your per-share risk, and that is what sizes the trade. A tighter stop means a smaller per-share loss, so the same dollar risk buys more shares; a wider stop means fewer shares. That is why you set the stop first based on the chart, then let it dictate share count — never the other way around.
What is a good risk-reward ratio?
Risk-reward is your potential profit at the target divided by the amount you risk to your stop. If you risk $3 a share to make $6, that is a 2:1 ratio, or 2R. Many traders look for at least 2:1 so that a modest win rate still comes out profitable — at 2:1 you only need to be right about a third of the time to break even. Add a target price above and this tool shows your ratio and potential profit automatically.
Can I size by a fixed dollar amount instead of a percent?
Yes. Toggle the risk field to a dollar amount and enter, say, $200 — the calculator sizes the trade so a stop-out loses exactly that. The percent mode is handy for scaling risk with your account as it grows or shrinks; the fixed-dollar mode is useful when you keep a flat risk budget per trade regardless of balance.
What if the position is worth more than my account?
That is normal and the tool will flag it. A tight stop can make the risk-based share count large enough that the position value exceeds your cash — you would need margin or leverage to hold it. Your dollars at risk stay capped at your chosen amount, but the notional exposure is bigger, so make sure your broker and your comfort level actually support that size before you trade it.
Does this account for commissions, slippage or leverage?
No — it sizes on the clean entry-to-stop distance only. Real fills slip, commissions nick your risk, and gaps can blow through a stop, so treat the share count as a disciplined starting point rather than a guarantee. This is an educational risk-sizing tool, not trading advice.
Disclaimer: these calculators are educational tools, not financial advice. They model your inputs with published formulas, but they cannot know your full situation — for decisions with real stakes, talk to a qualified professional. Formulas and defaults last reviewed .