Calculate the exact number of shares or units to buy based on your account size and maximum risk per trade.
Position sizing is the single most important risk-management decision a trader makes, and it is the one most beginners ignore. Before you ever think about entry signals, chart patterns, or where the market is headed, you have to answer a more basic question: how much of this trade can I afford to be wrong about? The position size calculator answers that question precisely. Instead of buying a round number of shares because it "feels right," you size every trade so that hitting your stop loss costs a fixed, pre-decided fraction of your account.
The logic is simple but powerful. You decide in advance how many dollars you are willing to lose on a single trade — usually a small percentage of your balance. You then measure the distance between your entry price and your stop loss. Dividing the dollar risk by that price distance tells you exactly how many shares to hold so that, if the stop is hit, your loss equals (and never exceeds) the amount you chose. This decouples your trade size from your conviction and ties it instead to a number you can survive losing, over and over, without blowing up your account.
Professional traders and funds treat this as non-negotiable. A trader who risks a consistent 1% per trade can be wrong ten times in a row and still keep roughly 90% of their capital — plenty to recover. A trader who "goes big" on a high-conviction idea can be wiped out by a single gap against them. Survival is what lets a positive edge compound over hundreds of trades, and correct position sizing is what guarantees survival.
The calculator divides your dollar risk by the price distance to your stop loss, giving you the exact number of shares to buy.
Dollar Risk = Account Balance × (Risk % ÷ 100)
Price Risk = |Entry Price − Stop Loss Price|
Position Size = Dollar Risk ÷ Price Risk
For example: $10,000 account, 1% risk, entry at $150, stop at $147.50 → $100 risk ÷ $2.50 = 40 shares.
Most professional traders risk 0.5% to 2% per trade. Beginners should start at 0.5–1%. Risking more than 2% per trade significantly increases the chance of account blowout.
Yes. For short trades, your stop loss will be above your entry price. The calculator uses the absolute difference, so direction doesn't matter.
For futures, use the Futures Tick Value Calculator instead, which accounts for contract multipliers and tick sizes.
Proper position sizing ensures that no single losing trade damages your account significantly. Even a strategy with a 40% win rate can be highly profitable with correct position sizing and a good risk/reward ratio.
Always round down. If the calculator suggests 40.6 shares, buy 40, not 41. Rounding up means your actual loss at the stop would exceed the risk you committed to. This calculator floors the result automatically so your real risk never breaches your stated limit.
That happens when your stop loss is very tight relative to your account and risk percentage — the math wants more shares than your cash or buying power allows. In that case you are capped by capital, not by risk. Either widen the stop to a sensible technical level or accept a smaller-than-ideal position. Never use leverage just to hit a calculated share count.
The most frequent error is fixing the share count instead of the risk — always trading "100 shares" regardless of where the stop sits. With a wide stop that exposes you to a huge loss; with a tight stop it under-uses your edge. Let the stop distance drive the size, not habit.
A second mistake is moving the stop to fit a bigger position. If you decide you want 200 shares and then place the stop wherever keeps your risk acceptable, you have inverted the process. The stop belongs at a level the chart justifies; size flows from there.
Finally, traders forget to recalculate after wins and losses. Risking 1% of a growing account means your dollar risk rises as you compound, and falls during drawdowns — an automatic brake. Re-run the numbers each session. Pair this tool with the Risk/Reward Calculator to confirm the trade is worth taking and the Expectancy Calculator to confirm your overall edge is positive.