Position Size Calculator
Calculate how many units of an asset you can trade based on your account balance, risk percentage, entry price and stop-loss price.
What is position sizing?
Position sizing is the process of determining how much of an asset to buy or sell for a particular trade. It helps traders control potential losses by limiting the amount of money exposed to risk.
How to calculate position size
First, multiply your account balance by your chosen risk percentage to calculate the maximum amount you are willing to lose.
Next, calculate the difference between your entry price and stop-loss price. Divide your maximum risk amount by that difference to calculate the number of units to trade.
Position Size = Risk Amount ÷ Stop-Loss Distance
Position sizing example
Suppose you have a $10,000 trading account and want to risk 1% per trade.
Your maximum risk is $100. If your entry price is $100 and your stop-loss is $95, your risk per unit is $5.
Dividing $100 by $5 gives a position size of 20 units, worth $2,000 at the entry price.
Why is position sizing important?
Consistent position sizing can help traders manage risk across different trades, regardless of the price of the asset being traded.
This calculator assumes a linear relationship between price changes and profit or loss, with the asset priced in US dollars. It is most suitable for stocks, spot cryptocurrency and similar instruments where each unit changes in value by one dollar for every one-dollar price move.
Forex pairs, futures contracts and other derivatives may require additional calculations involving contract sizes, pip values or currency conversions. Trading fees, slippage and gaps can also cause actual losses to exceed the planned risk amount.
Calculations are for educational purposes only and do not constitute financial advice.