Risk Percentage Calculator

What is trading risk percentage?

Trading risk percentage measures the potential loss on a trade as a percentage of your total account balance.

It helps traders understand how much of their account could be lost if a stop-loss order is executed at the specified price.

How to calculate risk percentage

First, calculate the distance between the entry price and stop-loss price.

Multiply this distance by the number of units traded to calculate the potential loss.

Finally, divide the potential loss by your account balance and multiply by 100.

Risk Percentage = Potential Loss ÷ Account Balance × 100

Risk percentage example

Suppose you have a $10,000 trading account and buy 20 shares at $100 each.

If your stop-loss is $95, your risk per share is $5. With 20 shares, your potential loss is $100.

Dividing $100 by your $10,000 account balance gives an account risk of 1%.

What is position exposure?

Position exposure compares the total notional value of a trade with your account balance.

A position worth $2,000 in a $10,000 account represents 20% exposure, even if the planned risk is only 1%.

Why does risk percentage matter?

Calculating risk as a percentage of account balance allows traders to compare potential losses across trades of different sizes.

However, setting a stop-loss does not guarantee execution at that exact price. Price gaps, slippage and market volatility may result in larger losses.

Important trading considerations

This calculator assumes each one-dollar price change per unit creates a one-dollar change in profit or loss.

It is most suitable for stocks, spot cryptocurrency and similar linear-priced assets. Forex, futures and derivatives may require contract multipliers, pip values or currency conversions.

Trading fees, spreads, borrowing costs and taxes are not included. Actual account balances may differ.

This calculator is for educational purposes only and does not constitute financial advice.