Position Sizing

In the world of investing, there is a famous saying: “Amateur traders focus on how much they can make, while professional traders focus on how much they can lose.”

The single biggest reason why 90% of traders fail is not because they pick the wrong stocks, but because they use the wrong position size. Buying too many shares on a single trade leads to emotional stress and, eventually, a blown-out account.

Use our Position Size Calculator to determine exactly how many shares or contracts you should buy to keep your risk under control.

1. Position Size Calculator

Enter your account details and trade parameters below to find your ideal position size.

🛡️ Position Size Calculator

Account Balance ($)

Risk per Trade (%)

Entry Price ($)

Stop Loss Price ($)

2. Why You Must Use This Tool

Adhere to the “2% Rule”

Professional money managers rarely risk more than 1% to 2% of their total account equity on a single trade. This means if you have a $25,000 account, you should not lose more than $500 if your trade hits its stop loss.

Our calculator does the math for you, ensuring that no matter how far away your stop loss is, your total dollar risk remains the same.

3. Understanding the Inputs

Account Balance: Your total available trading capital.
Risk per Trade (%): The percentage of your balance you are willing to lose if the trade fails.
Entry Price: The price at which you plan to buy.
Stop Loss Price: The “exit door” where you admit the trade is wrong and sell to protect your remaining capital.

4. What Should You Do Next?

Risk management is the foundation of building wealth. Once you have mastered how to protect your downside, you can focus on maximizing your upside:

Project Growth: Use our Compound Interest Calculator to see how your consistent wins will grow over the next decade.
Retirement Goal: See how your trading profits bring you closer to freedom using our FIRE Calculator.