Position size calculator
Size backwards from the loss: decide what percent of the account a failed trade may cost, set where the idea is wrong (the stop), and the position size falls out. The number most people guess is the one that should be computed.
The size
Units to buy20
- Position value
- $1,000
- At risk if stopped
- $100
- Risk per unit
- $5
- Position as % of account
- 10%
Estimate
workingfigures.com/calculators/position-size-calculator
Formula
risk = account × risk% ; units = risk ÷ |entry − stop| ; position = units × entry.
Assumptions
The stop executes at its price (real fills slip in fast markets), no fees, one position at a time. Sizing controls the planned loss only; it says nothing about whether the trade is good. General information, not investment advice.
FAQ
- Why does a tighter stop mean a BIGGER position?
- Because the loss per unit is smaller, the same money risk buys more units. That is the rule working as designed, and also its trap: a stop placed unrealistically tight produces an oversized position that a normal wiggle stops out. The stop belongs where the idea is wrong, not where the size looks nice.
- Is 1% per trade too conservative?
- Ten straight 1% losses leave 90% of the account, survivable and recoverable. Ten straight 5% losses leave 60%, needing a 67% run just to get back. The percent is chosen for the losing streak you can live through, not the winning one.
- Does this work for shorts?
- Yes: with the stop above the entry, the |entry − stop| distance is the same arithmetic. Borrow costs and margin requirements are extra layers this calculator does not model.