What is Position Sizing Calculator?
Calculate optimal position size for any trade based on your account size, risk percentage, and stop-loss distance Simply enter your values, and the calculator instantly computes accurate results using standard financial formulas. All calculations are performed entirely in your browser — nothing is stored or transmitted.
Formula Used
Risk a fixed percentage (1-2%) of total capital per trade. Divide total risk amount by risk per share (entry minus stop-loss) to get number of shares. Never risk more than 1-2% of account on a single trade.
How to Use This Calculator
- Enter your total trading capital (account size)
- Enter the percentage of capital to risk per trade (recommend 1-2%)
- Enter your planned entry price and stop-loss price
- Click Calculate to see exact shares to buy and total position value
- Adjust to fit within your maximum position size limit
Worked Example
Account: ₹5,00,000 | Risk: 1% = ₹5,000 | Entry: ₹500 | Stop Loss: ₹480 | Risk/Share: ₹20 → Shares to buy: 250 | Position Value: ₹1,25,000 (25% of account)
Why Use This Tool?
- Protect capital with scientifically calculated position sizes
- Survive losing streaks by limiting per-trade risk to 1-2%
- Scale positions appropriately to account size
- Eliminate emotion from position sizing decisions
Frequently Asked Questions
How much should I risk per trade?
The 1-2% rule is widely followed by professional traders: never risk more than 1-2% of your total capital on any single trade. At 1%, even 10 consecutive losing trades only reduce account by 10%. This allows you to survive extended losing streaks while staying in the game.
What is position sizing?
Position sizing determines how many shares or contracts to buy based on your risk tolerance and stop-loss level. Proper position sizing is arguably the most important factor in trading — more important than entry/exit signals. It determines if you survive long enough to let your edge play out.
How does position sizing help in risk management?
Fixed-percentage position sizing automatically reduces position size during drawdowns (as account value falls) and increases it during growth. This creates a natural protection mechanism — you risk less when you're losing and scale up when winning.
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