Position sizing decides how much of your account a single trade can lose. Enter your numbers below and the calculator returns the share count, position value, and — if you add a target — the risk:reward ratio.
Educational tool only — not financial advice. Position size = (account × risk%) ÷ (entry − stop). Always account for commissions, slippage, and gaps; markets can move past your stop.
How the position size formula works
The calculator uses the standard fixed-fractional position-sizing formula:
Shares = (Account size × Risk %) ÷ (Entry price − Stop price)
- Amount at risk — the dollar amount you accept losing if the stop is hit. Most traders keep this to a small fixed fraction of the account, typically 1–2%.
- Risk per share — the distance between your entry and your stop: what one share can lose.
- Position size — amount at risk divided by risk per share. The same formula works for stocks, crypto, futures and forex; just swap “shares” for contracts, lots or coins.
- Risk : reward — with a target filled in, the tool compares your potential loss to your potential gain. Many traders want 1:2 or better.
Worked example
- Account: $10,000 · risk per trade: 1% → $100 at risk
- Setup: entry $50.00, stop $48.00 → $2.00 risk per share
- Position size: $100 ÷ $2.00 = 50 shares → position value $2,500 (25% of the account)
- Target: $54.00 → $4.00 potential gain per share → risk:reward 1:2
If the stop is hit you lose $100 — exactly the planned 1%. Notice that the position value ($2,500) is far larger than the amount at risk ($100): position sizing controls the loss, not the size of the trade.
Using it for stocks, crypto and options
- Stocks: works out of the box — shares are the unit.
- Crypto: enter the coin’s price as entry and stop; the result is the number of units to buy.
- Futures and options: size = amount at risk ÷ dollar risk per contract (stop distance × contract multiplier).
- New to sizing? Our guides on day trading risk rules and starting to trade step by step cover the basics.
Tips for using it well
- Keep risk per trade small and consistent — consistency beats big swings.
- Set your stop from the chart (structure, volatility) first, then let the math decide the size — not the other way around.
- Remember real-world frictions: commissions, slippage, and overnight gaps can push a loss beyond your planned stop.
Frequently asked questions
How much of my account should I risk on one trade?
A common rule of thumb is 1-2% of account value per trade. The right number depends on your strategy and risk tolerance — smaller risk per trade means a losing streak hurts less.
Does this work for crypto, forex and futures?
Yes. The formula is the same for any instrument — position size equals amount at risk divided by the distance between entry and stop. For futures and options, multiply the stop distance by the contract multiplier to get dollar risk per contract.
What happens if my stop-loss is far from my entry?
A wider stop means a larger risk per share, so the calculator returns a smaller position — your dollar risk stays the same. If the resulting size feels too small to bother with, that is often a sign the setup’s stop placement needs a second look.
Why is the position value bigger than my amount at risk?
Position size controls the potential loss at your stop, not the total value of the trade. Keep in mind that slippage, gaps and fast markets can push a real loss beyond the planned stop.
What is a good risk to reward ratio?
Many traders look for at least 1:2 — potential gain twice the potential loss — so winners can cover losers even with a hit rate below 50%. Higher ratios usually come with lower win rates.
This tool is for education only and is not financial advice. Trading involves substantial risk of loss.