How to use it
- Enter your account balance in your account currency.
- Choose the % of the account you accept to lose if the stop is hit (1–2% is common).
- Enter your planned entry and stop-loss prices.
- Read the number of units to buy and check the position value fits your account.
The formula
Position size = (Account balance × Risk %) ÷ |Entry − Stop|
With $10,000, 1% risk ($100), entry $100 and stop $95, the stop distance is $5. Position size = 100 ÷ 5 = 20 shares, a $2,000 position.
Why position sizing matters more than entries
Two traders can take the same setup and end the year very differently. The difference is size. Fixing the amount you lose when you are wrong — rather than the number of shares you buy — keeps a losing streak survivable and makes results comparable from one trade to the next.
Choosing a risk percentage
Many traders risk between 0.5% and 2% of their account per trade. At 1%, ten consecutive losses cost roughly 10% of the account; at 5% they cost about 40%. Lower risk is slower but far more forgiving while you learn.
Stops come first, size second
Place your stop where the trade idea is invalidated — beyond support, resistance or the pattern boundary — and only then size the position. Moving the stop closer just to buy more is the most common way this calculation gets abused.
Educational content — not financial advice.