Position Size Calculator
Determine exactly how many shares you should buy or sell to strictly manage your risk per trade.
Account & Trade Setup
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Why is Position Sizing Important?
One of the biggest and most costly mistakes novice traders make is completely ignoring the mathematics of position sizing. If you trade too large, a string of just a few consecutive bad trades can entirely wipe out your trading capital. Conversely, if you trade too small out of fear, your account won't grow at a meaningful rate to justify the time invested. Proper position sizing acts as your ultimate defense mechanism, ensuring that you systematically risk the exact same, controlled percentage of your account on every single trade you take. It completely removes the emotional guesswork from your trading by standardizing your risk exposure, regardless of how far away your stop-loss is placed or what the entry price of the specific stock happens to be.
How to Use This Calculator
- Account Capital: Enter your total trading account balance.
- Risk per Trade (%): Enter the maximum percentage of your account you are willing to lose on this specific trade. Professional traders usually risk between 1% and 2%.
- Entry Price: The price at which you plan to enter the stock.
- Stop Loss Price: The price at which you will exit the trade if it goes against you.
The calculator will automatically divide your total risk amount by the risk per share (the difference between your entry and stop loss) to give you the exact number of shares you should trade.