Position size calculator
Work out how many shares or coins to buy so that, if your stop is hit, you lose only the amount you planned. Enter your numbers below.
The formula
- Money at risk = account size × risk per trade (%)
- Risk per share = entry price − stop price
- Position size = money at risk ÷ risk per share
A worked example
You have a $10,000 account and decide to risk 1% on a trade, which is $100. You want to buy at $50 with a stop at $47. Each share can lose $3 before the stop is hit, so $100 ÷ $3 = 33 shares. The position is worth 33 × $50 = $1,650, and if the stop is hit you lose about $99.
Notice the position value ($1,650) has nothing to do with the 1%. The stop distance decides the size: a tighter stop allows more shares, a wider stop fewer.
Choosing a risk percentage
Many traders risk between 0.5% and 2% of the account per trade. The reason is arithmetic: at 1% per trade, ten losses in a row leave you with about 90% of the account. At 10% per trade, the same streak leaves about 35%.
Where to put the stop
Put the stop where the idea is proven wrong, such as below a recent swing low or support level, and then size the position to fit. Moving the stop to make the position bigger defeats the purpose.
What this calculator does not include
Spreads, commissions, slippage and price gaps. A stock can open below your stop after bad news, and the loss will be bigger than planned. Use the result as a planning number, not a guarantee.
Related
One Candle Ahead is an educational practice game with virtual money. It does not provide financial advice, investment recommendations, brokerage, real-money trading, or guaranteed results.