How is position size calculated?

Risk amount = balance × risk %. Units = risk amount ÷ per-unit risk, where per-unit risk is the distance from entry to stop. Position value = units × entry price.

What risk percentage should I use?

Many traders risk 0.5%–2% of account equity per trade. Smaller risk per trade means a longer losing streak is survivable. This tool defaults to 1%.

Does it work for short trades?

Yes. For shorts the per-unit risk is the distance from your stop (above entry) down to the entry price.

How many shares should I buy with a £5,000 account?

Risk amount = balance × risk %. With 1% risk (£50) and a stop 10p away, units = £50 ÷ £0.10 = 500 shares. The exact number scales with your own stop distance.

Does position sizing work for forex?

Yes — treat the result as currency units and pair it with the pip value calculator to convert a pip-distance stop into a per-unit currency risk first.

The 1% rule caps risk on any single trade at 1% of account equity, so a string of losses erodes the account slowly rather than quickly.

Should position size change after a losing streak?

Some traders reduce risk % after consecutive losses to protect capital while confidence and win-rate data are rebuilt; rerun the sizing at a lower % to do this.

Risk & Money Management

Position Size Calculator

Calculate how many shares, units or contracts to trade from your account balance, risk percentage, entry and stop loss. Instant and accurate.

Position size is the number of shares, units or contracts to trade so that a stop-loss hit costs a fixed, chosen fraction of your account.

Position size

50 units

Risk amount: $100.00
Risk per unit: $2.00
Position value: $2,500.00
% of account: 25%

Worked example

A trader has a £10,000 account and risks 1% per trade. They want to buy a stock at 250p (£2.50) with a stop at 240p (£2.40).

Risk amount: £10,000 × 1% = £100
Per-unit risk (entry − stop): £2.50 − £2.40 = £0.10
Position size: £100 ÷ £0.10 = 1,000 shares
Position value: 1,000 × £2.50 = £2,500 (25% of the account)

The trader buys 1,000 shares. If the stop is hit, the loss is capped at £100 — exactly 1% of the account.

How this is calculated

Position size keeps the money you risk constant across trades. First we find the cash at risk, then divide by the per-unit risk:

riskAmount = balance × risk%
units = riskAmount ÷ |entry − stop|
positionValue = units × entry

For a long, per-unit risk is entry − stop; for a short it is stop − entry. The “% of account” figure shows how much buying power the resulting position uses.

When to use this calculator

Use this before every trade with a defined stop loss. Once you know your entry and stop, the calculator turns a fixed risk budget — say 1% of the account — into an exact number of shares, units or contracts, so a losing trade always costs roughly the same fraction of your equity.

It is most valuable when stop distances vary from setup to setup. A tight stop allows a larger position for the same risk; a wide stop forces a smaller one. Traders who size by feel usually take too much risk on wide-stop trades and too little on tight-stop ones.

It applies to stocks, forex, futures and crypto alike — anything with a price and a stop. For forex specifically, pair it with the pip value calculator so a stop measured in pips converts cleanly into per-unit currency risk first.

Common mistakes

Sizing from the position value instead of the risk amount — position size should come from how much you can lose, not what looks affordable.
Ignoring slippage and gaps, so the real stop-out risk ends up larger than the intended 1%.
Recalculating size only sometimes — the stop distance changes with every setup, so position size must be recalculated per trade, not reused.

Frequently asked questions

How is position size calculated?: Risk amount = balance × risk %. Units = risk amount ÷ per-unit risk, where per-unit risk is the distance from entry to stop. Position value = units × entry price.
What risk percentage should I use?: Many traders risk 0.5%–2% of account equity per trade. Smaller risk per trade means a longer losing streak is survivable. This tool defaults to 1%.
Does it work for short trades?: Yes. For shorts the per-unit risk is the distance from your stop (above entry) down to the entry price.
How many shares should I buy with a £5,000 account?: Risk amount = balance × risk %. With 1% risk (£50) and a stop 10p away, units = £50 ÷ £0.10 = 500 shares. The exact number scales with your own stop distance.
Does position sizing work for forex?: Yes — treat the result as currency units and pair it with the pip value calculator to convert a pip-distance stop into a per-unit currency risk first.
What's the 1% rule?: The 1% rule caps risk on any single trade at 1% of account equity, so a string of losses erodes the account slowly rather than quickly.
Should position size change after a losing streak?: Some traders reduce risk % after consecutive losses to protect capital while confidence and win-rate data are rebuilt; rerun the sizing at a lower % to do this.