Position Size Calculator
Decide the risk first and let the share count follow: account size, risk percentage, entry and stop produce the position that loses exactly what you chose if the stop is hit.
Settings
Keyboard shortcuts
| Tab / Shift+Tab | Next / previous field |
| ↑ / ↓ | Step a value by 1 (Shift: 10, Alt: 0.1) |
| Enter | Copy the primary result |
| [ / ] | Fewer / more decimal places (percent) |
| Esc | Clear the field |
The position sizing formula
Position sizing runs backwards from how most people buy stocks. Instead of "how many shares can I afford?", it asks "how many shares keep my loss at the number I chose?":
shares = (account × risk%) ÷ |entry − stop|
Everything in the formula is under your control before the trade. The account and risk percentage set the dollars you're willing to lose; the entry-to-stop distance says how many of those dollars one share can burn. Notice what's absent: conviction, upside, how good the setup looks. Sizing is pure defense — the offense lives in the risk/reward ratio.
How to use it
- Enter your account size. The total capital the risk percentage applies to — $10,000 in the worked example.
- Choose the risk percentage. How much of the account one losing trade may cost. 1% is the common convention; the field accepts decimals.
- Enter entry and stop prices. The price you plan to buy at and the price where you will exit if wrong — $50 and $48 here.
- Read shares and cost. Shares = (account × risk%) ÷ (entry − stop), rounded down: 50 shares, $2,500 — a quarter of the account, risking exactly $100.
The mistake to avoid
Sizing by feel — a "small" $2,000 position, a "big" $8,000 one — decouples your losses from your plans, because the loss depends on the stop distance, not the position's size. A $2,000 position with a 20% stop loses $400; an $8,000 position with a 2% stop loses $160. Prospect-theory research shows losses hurt roughly twice as much as gains satisfy, which is precisely why the loss is the number to fix in advance — the disposition-effect article connects that psychology to what traders actually do.
Position sizing FAQ
How is position size calculated from a stop loss?
Two divisions. First, dollars at risk: account × risk% — a $10,000 account risking 1% puts $100 on the line. Second, risk per share: |entry − stop| — entering at $50 with a stop at $48 risks $2 a share. Shares = $100 ÷ $2 = 50 shares, costing $2,500. The stop distance, not the account, decides the share count.
What is the 1% rule?
A sizing convention: risk at most 1% of your account on any single trade, so that no one loss — or even a bad streak — can knock you out. Ten consecutive 1% losses leave 90.4% of the account; ten 10% losses leave 34.9% — and the deeper you fall, the more the recovery math works against you (see the loss-recovery table).
Why does the calculator round shares down?
Rounding up would risk more than you chose — the floor keeps the risk at or under your number. If your broker supports fractional shares, flip the toggle and the exact figure appears (risk $100 with $3 per share is 33.3333 shares). Whole-share flooring means your realized risk is usually slightly below target, never above.
What if the computed cost is bigger than my account?
That happens when the stop is very tight: risk per share shrinks, so the share count balloons. The calculator flags it — buying that many shares would take leverage, which adds costs and risks this page doesn't model. A wider stop or a smaller risk percentage brings the position back inside the account.