Position Size Calculator

What is position sizing?

Position sizing is how you translate your account size and risk tolerance into the exact number of shares, contracts, or units to buy on any given trade. It's the single most important risk management decision you make — more important than the entry, the setup, or the exit.

Most traders get this wrong. They pick a number of shares that "feels right" based on how confident they are, which means winning trades and losing trades end up risking wildly different amounts. That's how accounts blow up on a single bad trade.

The 1% rule

Professional traders almost universally risk 0.5% to 2% of their account per trade — most sit at 1%. At 1% risk, you'd need to lose 10 trades in a row to drop ~10% of your account. That's statistically rare for any strategy with a real edge, which means you live to keep trading even through a rough stretch.

How the calculation works

• Risk amount = Account × Risk %
• Stop distance (per share) = |Entry − Stop|
• Position size = Risk amount ÷ Stop distance
• For futures: multiply the point distance by the contract multiplier, then divide into risk amount

Common mistakes

• Sizing up "just this once" because a setup looks really good — the cost of being wrong at 2× size is 2× the drawdown
• Ignoring commissions and slippage — the real stop is usually 10-20% worse than the quoted stop
• Forgetting that futures and options have embedded leverage — a $5,000 margin trade can lose $20,000 if you don't stop out
• Using a fixed share count instead of a fixed risk — this scales risk with volatility, which is backward