Position size calculator
How many shares to buy should be decided by the loss you can accept, never by how sure you feel about a setup. Put in your account size, the percentage you are willing to risk, your entry and your stop, and you get the number of shares, the money on the line and how much of the account the trade ties up. Oversized positions are capped, and a table shows what a run of losses would do at each risk level.
How the trade sits in your account
The size of the position against the whole account, and the part of it you would actually lose if the stop is hit.
Position size and losing runs at each risk level
This trade at other risk percentages, and what would be left after ten losses in a row. Small risk changes matter a lot over a bad patch.
| Risk per trade | Shares | Position value | Money at risk | After 10 losses |
|---|
How the share count is found
Size follows from risk. You pick how much you can lose, the stop sets the loss per share, and the number of shares falls out of those two. A cap then stops a very tight stop from creating a huge position.
Money at risk
A set percentage of the account.
risk amount = account × risk %
Loss per share
The gap to the stop plus commission both ways. Whether it is a long or a short depends on which side of the entry the stop sits.
risk per share = |entry − stop| + commission
Number of shares
Rounded down to whole shares.
shares = risk amount ÷ risk per share
Apply the cap
If the trade would use more of the account than you allow, it is cut down, which also reduces the money at risk.
shares = min(shares, account × cap ÷ entry)
Losing run
Each loss takes the risk percentage of whatever is left.
after n losses = account × (1 − risk %)n
Position sizing FAQ
How is position size calculated?
Choose how much of the account you can lose on the trade and divide it by the gap between entry and stop. One percent of a $25,000 account is $250; with an entry at $50 and a stop at $47.50 the loss per share is $2.50, so you buy 100 shares.
How much of my account should one trade risk?
Most traders stay between 0.5 and 2 percent. At 1 percent, ten straight losses cost about 10 percent of the account, which hurts but is survivable. At 5 percent the same run costs around 40 percent, which is very hard to come back from.
Why cap the position as well as the risk?
A very tight stop can produce an enormous position, and if the stock gaps through the stop overnight the loss depends on size, not on the stop. Limiting how much of the account goes into one trade limits that damage.
Does a higher share price change the position size?
Not directly; the distance to the stop does. A $10 stock with a $1 stop and a $200 stock with a $1 stop get the same share count for the same risk, though the second ties up far more money.
Should commissions be included?
Yes, if you pay any. Commission in and out adds to your loss when the stop is hit, so it is part of the loss per share. Plenty of brokers now charge nothing on stocks, in which case leave it at zero.
Can I size short trades with it?
Yes. Put the stop above your entry and the calculator treats the trade as a short. The loss per share is still the gap between entry and stop.