Decide how much to buy before you enter. Risk a fixed slice of your account, set your stop and target, and see the reward the trade implies.
Not a broker · Not advice · Math runs on your server
Inputs
01
Size
02
Shares to buy
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Position value
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Risk / reward
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Risk —Reward —
Risk
Reward
Planned risk—
Actual risk (rounded down)—
Potential reward—
Share count is rounded downnever risk more than planned
How the position size calculator works
Enter account capital and risk per trade. With $10,000 and 1%, you are willing to lose $100 on this trade — no more.
Enter entry and stop. The distance between them is your risk per share. $150 entry, $140 stop = $10 risk per share.
Read your size. $100 ÷ $10 = 10 shares, rounded down so the actual risk never exceeds the plan. Add a target to see the risk/reward the trade implies.
Why size from the stop, not the target
Beginners pick a share count that "feels right" and hope. Professionals do it backwards: the stop is where the trade is proven wrong, so the stop defines the risk, and the risk defines the size. A tight stop means a bigger position for the same dollars at risk; a wide stop means a smaller one. Either way, the dollar risk stays fixed — which is what keeps a losing streak from becoming a blown account.
The 1% rule, honestly
Risking 1% per trade means ten consecutive full losses cost you roughly 10% of the account — survivable. At 10% per trade, the same streak costs 65%. The math of drawdowns is asymmetric: lose 50% and you need 100% to get back. Fixed-fraction sizing is the simplest way to respect that asymmetry. Many traders use 1–2%; the right number depends on your win rate and average risk/reward, but the principle doesn't change: size the risk first, then check the reward justifies it.
Educational illustration only — not investment advice. Excludes commissions, fees, and slippage.
Frequently asked questions
How do you calculate position size?
Position size = (account capital × risk percent) ÷ (entry price − stop price). That gives the share count whose loss at your stop exactly equals the amount you chose to risk. The calculator rounds down to whole shares so you never risk more than planned.
What is the 1% rule in trading?
The 1% rule says never risk more than 1% of your account on a single trade. Ten consecutive full losses then cost roughly 10% — survivable. Many traders use 1–2% depending on their strategy.
What is a good risk/reward ratio?
A common minimum is 1:2 — risking $1 to make $2 — so you can be right less than half the time and still profit. The calculator shows your ratio from your actual stop and target, so you can reject trades whose math doesn't work before entering.
Should position size come before or after picking a target?
Before. Size is a function of your stop (risk), not your target (hope). Set the stop where the trade is proven wrong, size from that, then check the target gives an acceptable risk/reward. If it doesn't, skip the trade.
Sized it? Now plan the exit.
Create a free account to run the scale-out math on this entry, save the position, and attach a trading plan — that is the part TradingWise is built for.