Position size calculator
The right number of shares comes from how much you are prepared to lose, not from how confident you feel about the trade. Enter your account size, the percentage you will risk, your entry and your stop, and this calculator gives you the share count, the money at risk and how much of your account the position ties up. It also caps oversized positions and shows how a losing streak would hit the account at each risk level.
Where your money sits
The position compared with your account, and the slice of it you actually stand to lose at the stop.
Size and losing streaks at each risk level
The same trade at other risk percentages, and what ten losses in a row would leave you with. Small changes in risk make a big difference over a bad run.
| Risk per trade | Shares | Position value | Money at risk | After 10 losses |
|---|
How position size is worked out
Position size is set by risk. You choose the amount you can lose, the stop sets the loss per share, and the share count follows. A cap then stops tight stops from producing an oversized position.
Money at risk
A fixed share of your account.
risk amount = account × risk %
Risk per share
The distance to the stop plus round-trip commission. Long or short is decided by which side of the entry the stop is on.
risk per share = |entry − stop| + commission
Shares
Rounded down to whole shares.
shares = risk amount ÷ risk per share
Apply the cap
If the position would use more of the account than you allow, it is cut back, which also lowers the money at risk.
shares = min(shares, account × cap ÷ entry)
Losing streak
Each loss takes the risk percentage of what is left.
after n losses = account × (1 − risk %)n
Position size questions
How do you calculate position size?
Decide how much of your account you are willing to lose on the trade, then divide that amount by the distance between your entry and your stop. Risking 1 percent of a $25,000 account is $250. With an entry at $50 and a stop at $47.50, the risk per share is $2.50, so the position is 100 shares.
What percentage of my account should I risk per trade?
Many traders risk between 0.5 and 2 percent per trade. At 1 percent, ten losses in a row cost about 10 percent of the account, which is painful but survivable. At 5 percent, the same streak costs about 40 percent, which is very hard to recover from.
Why cap the position size as well?
A very tight stop can produce a huge position. If the stock gaps past your stop overnight, the loss is set by the position size, not the stop. A cap on how much of the account goes into one position limits that damage.
Does position size depend on the stock price?
Not directly. It depends on the distance to your stop. A $10 stock with a $1 stop and a $200 stock with a $1 stop get the same number of shares for the same risk, although the second ties up far more capital.
Should I include commissions?
Yes, if you pay them. Commissions on the way in and out add to what you lose if the stop is hit, so the calculator includes them in the risk per share. Many brokers now charge nothing on stocks, in which case leave it at zero.
Does this work for short trades?
Yes. Put the stop above the entry and the calculator treats it as a short. The risk per share is still the distance between entry and stop.