Position Size Calculator

Example: sizing a trade before entry

Assume your account balance is $10,000 and you want to risk 1% on the trade. That gives a planned risk amount of $100.

If your entry price is 100 and your stop loss is 98, your stop distance is 2 points. Dividing $100 by 2 gives a position size of 50 units.

The goal is not to predict the trade. The goal is to know the risk before entering.

How the calculation works

This calculator uses the distance between entry and stop loss to convert your planned risk into a position size.

Risk amount = account balance × risk %

Stop distance = absolute difference between entry price and stop loss

Position size = risk amount / stop distance

This is a simplified instrument-neutral calculation. For forex, futures, CFDs or instruments with tick values, contract multipliers or lot rules, you may need to adjust the result to match your broker or platform.

How to use this in trade review

Position sizing is not only a pre-trade calculation. It is also something worth reviewing after the trade.

Useful review questions:

Was the risk defined before entry?
Did the actual position size match the planned risk?
Was the stop moved after entry?
Was the trade larger because of emotion, confidence or revenge trading?

A journal makes this visible over many trades. One oversized trade can be easy to explain away. A repeated pattern is harder to ignore.

Common questions

What is position sizing?

Position sizing is the process of deciding how large a trade should be based on the amount you are willing to risk. It connects your account size, stop loss and risk rule.

Why does stop loss distance affect position size?

A wider stop means each unit carries more risk, so the position size must be smaller to keep the same risk amount. A tighter stop allows a larger position, but it may also be easier to get stopped out.

Should every trade risk the same amount?

Not necessarily, but many traders use a fixed percentage risk to keep results easier to review. Changing risk randomly makes performance harder to understand.

Is this calculator exact for all markets?

No. It is a general risk calculator. Some markets require tick value, contract size, lot size, currency conversion or broker-specific rules. Always compare the result with your trading platform before placing a trade.

Related trading tools

Continue the risk review with these free browser-based tools:

Risk Reward Calculator
R-Multiple Calculator
Daily Loss Limit Calculator
Expectancy Calculator
Drawdown Recovery Calculator

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