Tools

Position Size Calculator

Free position size calculator. Enter the dollar amount you will risk and your stop distance to get your exact share count for the trade.

Published · Updated · 4 min read

$

The most you are willing to lose if the stop is hit. Many traders use 0.5% to 1% of account equity.

$

Dollars per share between your entry and your stop. Entry $50, stop $45 is a $5 stop distance.

Position size

20 shares

$100 risk ÷ $5.00 stop = 20 shares

With 20 shares, a stop at $5.00 away loses exactly $100.00.

Quick reference for a $100 risk

Stop distance Shares Actual risk at that size
$0.05 2,000 $100.00
$0.10 1,000 $100.00
$0.25 400 $100.00
$0.50 200 $100.00
$0.75 133 $99.75
$1.00 100 $100.00
$5.00 20 $100.00
$10.00 10 $100.00
$25.00 4 $100.00
$50.00 2 $100.00
$100.00 1 $100.00

Shares are rounded down so you never risk more than you entered. "Actual risk" is what the rounded share count loses at that stop.

How position sizing works

Position size is the answer to one question: how many shares can I hold so that if my stop is hit, I lose only the amount I chose in advance? Everything else, including the ticker, the setup, and how confident you feel, comes after that number.

The formula has two inputs.

  1. Risk per trade. The dollar amount you are willing to lose on this one idea. Most traders set it as a fixed fraction of the account, typically 0.5 percent to 1 percent, so that a run of losses stays survivable. On a $10,000 account, 1 percent is $100.
  2. Stop distance. The gap in dollars between your entry price and the price where you will admit the trade is wrong. If you buy at $50 and your stop is at $45, the stop distance is $5.

Divide the first by the second:

shares = risk per trade ÷ stop distance
$100 ÷ $5 = 20 shares

If those 20 shares fall $5 each, you lose $100, which is exactly what you agreed to. Round down to a whole share so a fraction never pushes you past your limit.

Why size from the stop, not from the price

Sizing by dollar amount, for example "I put $2,000 into every trade," feels consistent but is not. A $2,000 position in a stock with a $0.50 stop risks a different amount than a $2,000 position with a $5 stop. Sizing from the stop distance makes every trade cost the same when it fails. That is what lets you compare setups on an equal footing and what makes your R-multiples meaningful in a journal: a 2R win is two units of the risk you chose, no matter the ticker.

Worked examples

  • Tight stop, larger share count. $100 risk with a $0.25 stop is 400 shares. Tight stops buy you size, but they also get hit by noise. Set the stop where the idea is invalidated, then let the calculator set the size.
  • Wide stop, smaller share count. $100 risk with a $10 stop is 10 shares. Wide stops survive noise but cap your position. Both are fine. What is not fine is picking the share count first and finding a stop that fits it.

Futures, options, forex, and crypto

The formula is the same; only the units change.

  • Futures. Stop distance is ticks multiplied by the tick value. A 10-tick stop on ES at $12.50 a tick is $125 per contract. $250 risk ÷ $125 = 2 contracts.
  • Options. Contracts control 100 shares, so multiply the per-share premium move by 100. A $0.40 stop on the premium is $40 per contract. $200 risk ÷ $40 = 5 contracts.
  • Forex. Stop distance is pips multiplied by pip value for your lot size. Compute pip value first, then divide as usual.
  • Crypto and perps. Most venues allow fractional size, so use the exact result instead of rounding down. On Hyperliquid, a $100 risk with a $250 stop distance on BTC is 0.4 BTC.

Common mistakes

  • Forgetting commissions and slippage. Your real loss will be a little larger than the stop distance implies. If that matters at your size, shave the risk input by a few percent.
  • Moving the stop after sizing. Widening the stop after entry silently multiplies your risk. If the stop moves, the size was wrong.
  • Sizing up after a win, down after a loss. Fixed-fraction risk already scales with your account. Emotional adjustments on top of it are the thing a journal is for catching.

Frequently asked questions

What percentage of my account should I risk per trade? Most guidance lands between 0.5 percent and 2 percent, with 1 percent as the common default. Lower is safer while you are still proving your edge. Ten straight losses at 1 percent is a 10 percent drawdown; at 5 percent it is 40 percent.

Should I round shares up or down? Down. Rounding up means the stop loses more than you planned. The table on this page shows the actual risk at the rounded size so you can see the small gap.

Does this work for short positions? Yes. Stop distance is the gap between entry and stop regardless of direction. Short at $50 with a stop at $55 is a $5 stop distance.

What about position value or buying power? The calculator sizes for risk, not for capital. Multiply the share count by your entry price to check whether the position fits your buying power. If it does not, the trade is too big for the account at that stop, and the answer is a smaller size, not a wider stop.

Track every trade's R in your journal

Sizing from the stop is what makes R-multiples possible. EdgeDojo records your stop and target on every trade, computes the R-multiple automatically, and shows the distribution across your whole history so you can see whether your winners are actually paying for your losers. It is free during open beta. Join the free beta.

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