Position Size Calculator

Most position size calculators start from the trade: a price, an amount to invest, maybe a stop. This one starts from the loss you can afford. You first say what share of the account you are willing to lose if you are wrong, and only then does the calculator tell you how many shares that allows. Size comes out of risk, not out of how good the idea looks.

It then keeps everything in the same unit. Each target price is shown as a multiple of what you are risking (an R), with the win rate you would need at that ratio just to break even. A losing-streak table shows what five or ten stopped-out trades in a row would do to the account at your setting and at the usual alternatives. There is no signal, rating or suggestion anywhere on the page: it is a tool for learning to control risk, and the decisions stay with you.

How to use the position size calculator

1. Choose long or short. For a long trade the stop sits below the entry; for a short trade it sits above.
2. Enter your account size and risk per trade. The risk is the percentage of the account you accept losing if the stop is hit — often 0.5% to 2%.
3. Enter the entry and stop-loss prices. The calculator divides your risk budget by the distance between them and rounds down to whole shares. Turn on fractional shares if your broker allows them.
4. Optionally add a commission and a position cap. Commissions are counted on the way in and the way out. The cap, as a percentage of the account, stops a tight stop from producing a position you cannot pay for; 100% means no margin.
5. Type up to three target prices. The table shows the move, the reward-to-risk ratio, the net profit and the win rate needed to break even at that ratio. One button copies target 1 into the Profit / loss tab, which works out the result of any single stock trade on its own.

The formulas

Position sizing by a fixed share of the account is usually called the fixed-fractional method. It is described in most trading risk texts, for example Van K. Tharp’s Trade Your Way to Financial Freedom (chapter on position sizing).

Risk budget       = account × risk %
Risk per share    = |entry − stop|
Shares            = floor((risk budget − 2 × commission) ÷ risk per share)
Position value    = shares × entry
Loss at stop      = shares × risk per share + 2 × commission
R multiple        = (target − entry) ÷ (entry − stop)      long trades
                  = (entry − target) ÷ (stop − entry)      short trades
Break-even win %  = 1 ÷ (1 + R)

If a position cap is set, the share count is also limited to floor(account × cap % ÷ entry), and the calculator tells you how much smaller your real risk becomes.

The break-even win rate is worth learning by heart, because it links the ratio you aim for to how often you must be right:

The losing-streak table uses two more formulas. After n losses in a row, each costing the same percentage r of what is left, the account is down 1 − (1 − r)^n. Getting back from a drawdown d takes a gain of d ÷ (1 − d):

Worked examples

Example 1: the basic calculation

A 10,000 account, 1% risk, a long entry at 20 and a stop at 19. The risk budget is 10,000 × 1% = 100. Each share risks 1, so the size is 100 ÷ 1 = 100 shares, a position of 2,000 — 20% of the account. If the stop is hit you lose 100, exactly the 1% you chose.

With targets at 22 and 23, the first is a move of 2 for a risk of 1, so 1:2, worth +200 (+2% of the account); you would break even winning one trade in three. The second is 1:3, worth +300, and breaks even at one in four.

Example 2: the stop sets the size

Keep the same account, risk and entry, and move only the stop. With the stop at 19.50 each share risks 0.50, so the budget buys 200 shares (4,000). With the stop at 17 each share risks 3, and 100 ÷ 3 = 33.3 rounds down to 33 shares — a 660 position that loses 99 at the stop. The amount at risk barely changes; only the number of shares does. A wide stop is not riskier in money terms, it just means a smaller position.

Example 3: when the stop is very tight

A 10,000 account risking 2%, entry 50, stop 49.50. The budget of 200 divided by 0.50 gives 400 shares — a 20,000 position, twice the account. The calculator warns that this needs margin. With the max position set to 100%, the size is cut to 200 shares and the real risk falls to 100, or 1% of the account. Tight stops are also the ones most easily skipped over by a gap, which leads to the first common mistake below.

Example 4: a short trade with commissions

A 20,000 account, 1% risk, short at 100 with a stop at 104. The budget of 200 divided by 4 gives 50 shares (5,000). A target of 92 is a move of 8 against a risk of 4, so 1:2, worth +400, or 2% of the account. Add a commission of 5 per order and the size drops slightly, because 10 of the budget is now set aside for the two orders.

Example 5: a simple profit and loss

In the Profit / loss tab, 100 shares bought at 25 and sold at 30, with 5 commission each way, make 3,000 − 2,500 − 10 = +490. The return is 490 ÷ 2,505 = +19.56% on the cost including the buy commission, and the break-even exit price is 2,510 ÷ 100 = 25.10.

Common mistakes

• Treating the stop as a guaranteed price. A stop order becomes a market order when it is triggered, and the fill can be worse than the stop price, especially after an overnight gap. The U.S. SEC’s investor education site, Investor.gov, explains this in its entry on stop orders. Your real loss can be larger than the calculator’s figure.
• Choosing the size first and the stop afterwards. Placing the stop wherever keeps the loss small for a size you already wanted turns risk control upside down. Put the stop where the trade idea is proven wrong, then let the calculator size it.
• Rounding up. 33.3 shares means 33. Rounding up puts you over the budget on every trade.
• Forgetting that losses compound. Ten losses at 5% are not −50%, they are −40.13% — but you then need +67% just to get back to where you started.
• Chasing ratios without the win rate. A 1:5 target looks attractive, but if it is reached one time in ten the trade still loses money over time. The break-even column shows the bar a ratio sets.
• Ignoring position size in percent of the account. A correct risk can still mean one stock is half your account. The position cap is there to keep that visible.

Glossary

• Risk budget — the money you accept losing on one trade if the stop is hit.
• Stop-loss — the price at which you plan to exit because the trade idea has been proven wrong.
• R — one unit of the risk on a trade. A 2R gain is twice the amount risked.
• Reward : risk ratio — the distance to the target compared with the distance to the stop.
• Drawdown — the fall from the account’s high point, as a percentage.
• Long / short — buying to sell higher later, or selling borrowed shares to buy back lower.

Every figure on this page is an estimate that depends on the prices you type in; it does not account for slippage, gaps, taxes or borrowing costs on short positions, and it is not financial advice. If you build a position in several buys, the average cost calculator gives the cost per share to use as your entry. To compare results held for different lengths of time, the ROI & CAGR calculator puts returns on a yearly basis.

Last reviewed: October 30, 2026