Position Size Calculator
Position sizing decides how many shares to buy so that a losing trade only costs a small, predefined slice of your account. Enter your account size, how much you are willing to risk, your entry price, and your stop-loss below to see the number of shares that keeps your risk in check. Everything runs in your browser; nothing you type is sent anywhere.
How the Position Size Calculator Works
The math has two steps. First, your amount at risk = account size × risk %. Then the number of shares = amount at risk ÷ (entry price − stop-loss price), because the gap between your entry and stop is what you lose per share if the trade goes against you. Worked example: with a $10,000 account risking 1%, you are willing to lose $100. If you enter at $50 with a stop-loss at $45, you risk $5 per share, so $100 ÷ $5 = 20 shares. Buying 20 shares keeps your loss at roughly $100 if the stop is hit.
Why Position Sizing Matters
Position sizing is core risk management. By deciding your share count from a fixed dollar risk rather than a gut feeling, you cap the loss on any single trade so that no one position can seriously hurt your account. Traders who skip this step often bet too big and let a handful of bad trades wipe out weeks of progress — one of the most damaging common beginner mistakes. Sizing consistently is what lets you survive losing streaks and stay in the game long enough to learn.
Setting a Sensible Stop-Loss
A stop-loss is a planned exit price where you accept the trade did not work and step out to cap the damage. Place it where your trade idea is proven wrong — below a support level or a recent swing low, for instance — not at an arbitrary round number just to make the position size larger. A stop that sits too close will get triggered by normal price noise; one that is too far means a bigger loss per share and a smaller position. To understand how stop and limit orders actually execute, see our guide to order types.
Frequently Asked Questions
First decide how much of your account you are willing to lose on the trade, for example 1%. Multiply your account size by that percentage to get your dollar risk. Then divide that dollar risk by the difference between your entry price and your stop-loss price. The result is the number of shares that keeps your loss within your chosen limit if the stop is hit.
A common guideline among traders is to risk only 1% to 2% of your account on any single trade. Keeping each trade's risk small means a losing streak will not seriously damage your account, which is one of the most important habits in long-term risk management. The right number depends on your own risk tolerance.
A stop-loss is a price you decide in advance at which you will exit a losing trade to cap your loss. Setting it before you buy removes emotion from the decision. This calculator uses the gap between your entry price and your stop-loss to work out how many shares keep your risk within your chosen limit.
Practice Risk Management Free
Download CustomStocks free from the App Store to practice sizing positions and setting stop-losses with virtual money and real market prices. No account required. Android coming soon.
