Calculators
Position size and risk calculator
The size of a position is not a decision about conviction; it is the arithmetic that follows from an account size, a stop, and the percentage you have decided a single mistake is allowed to cost. This does that arithmetic, including the part where the answer is larger than your account.
The trade
Position size
83 shares
$8,300 at $100.00, 16.6% of the account.
Risk per share
$6.00
6.00%
If the stop fills
−$498.00
1.00% of account
If it gaps 5% past it
−$888.10
1.78% of account
Shares = (equity × risk%) ÷ |entry − stop|, rounded down, then capped at equity ÷ entry because a position cannot exceed the cash that buys it. Fees, slippage and margin are not modelled.
| Target | Price | Move | Profit | On account |
|---|---|---|---|---|
| 1R | $106.00 | 6.00% | $498.00 | 1.00% |
| 1.5R | $109.00 | 9.00% | $747.00 | 1.49% |
| 2R | $112.00 | 12.00% | $996.00 | 1.99% |
| 3R | $118.00 | 18.00% | $1,494 | 2.99% |
| 5R | $130.00 | 30.00% | $2,490 | 4.98% |
| Risk per trade | Risk budget | Shares | Position | 10 losses in a row |
|---|---|---|---|---|
| 0.25% | $125.00 | 20 | $2,000 | −2.5% |
| 0.50% | $250.00 | 41 | $4,100 | −4.9% |
| 1.00% | $500.00 | 83 | $8,300 | −9.6% |
| 2.00% | $1,000 | 166 | $16,600 | −18.3% |
| 3.00% | $1,500 | 250 | $25,000 | −26.3% |
| 5.00% | $2,500 | 416 | $41,600 | −40.1% |
Why the size is not a judgement call
Almost every documented trading system that survives contact with a real account has one thing in common, and it is not the entry. It is that the size of a position is derived rather than chosen: a fixed fraction of equity is put at risk, the distance to the stop converts that fraction into a share count, and conviction has no vote. The reason is not modesty about forecasting. It is that a size chosen per trade drifts upward after a run of wins and downward after a run of losses, which loads the largest position into the trade taken with the least caution.
The bottom table is the part worth sitting with. Ten losses in a row is not a pathological scenario — a system that wins 45% of the time will produce a streak of ten somewhere in a few hundred trades, and the arithmetic does not care that each one felt like a good idea. At 1% per trade that streak costs about a tenth of the account and is recoverable. At 5% it costs about 40%, and the drawdown-recovery arithmetic then requires a 67% gain to get back to where you started.
Two things this cannot do for you. The stop has to be somewhere the trade is actually wrong, not wherever makes the position size come out at a number you like — placing it to fit the size is the same mistake as choosing the size to fit the conviction, arrived at from the other direction. And the loss is a floor, not a ceiling: a stop is an order to sell once a price trades, so an overnight gap fills below it. That is the field at the bottom of the inputs, and on a single-stock position around an earnings date it is the number that matters more than the planned risk.
Questions people ask about this
- What risk percentage should I use?
- The documented trend-following systems that report a figure at all cluster between 0.5% and 2% of account equity per position. The number matters less than the fact that it is fixed in advance: a size chosen per trade drifts upward after wins and downward after losses, which is exactly backwards.
- Why is the calculated position bigger than my account?
- Because a tight stop makes the arithmetic ask for more shares to lose the same dollar amount. When the required position exceeds the capital you have, the constraint is no longer risk, it is buying power — the calculator flags this and shows the largest position the account can actually hold.
- Does the stop guarantee the loss?
- No. A stop is an order to sell at the market once a price trades, so a gap through it fills lower, sometimes much lower. That is why the results include what an overnight gap of a given size would cost: the planned risk is a floor on the outcome, not a ceiling.
Sources and method
- Data
- None. This tool sends nothing anywhere — every figure is computed in your browser from the values you type, and no input is stored, logged or transmitted.
- How it was calculated
- Fixed-fractional sizing, computed in your browser: shares = (equity x risk%) ÷ |entry − stop|, rounded down, then capped at equity ÷ entry because a position cannot exceed the cash that buys it. The R-multiple ladder measures targets in units of that same risk. Losing streaks are compounded against a shrinking account rather than multiplied. Fees, slippage and margin are not modelled.
- How often it changes
- Never. The formula is fixed; the answer changes only when you change an input.
- Citing this page
Free to quote — please link rather than copy the table.
Plutux. "Position size and risk calculator." https://plutux.ai/resources/tools/position-size-calculator
Historical figures for information only — not investment advice, and not a forecast.
Related tools
- Drawdown recoverySee the gain required to get back to even after a loss, and how many years of a given return that takes.
- Average costAdd up several buys at different prices to get a weighted average cost, break-even price, and what a further purchase would move it to.
- Historical drawdownsPeak, trough, depth, and how long it took to get back — for every decline of at least 10% in the record.
Plutux is not an investment adviser. Market data and AI-generated analysis are for information and education only, not investment advice. Disclaimer