Position Size Calculator
Shares to buy from risk%.
Shares = (account × risk%) ÷ (entry − stop).
How the Math Works
The Position Size Calculator determines the number of shares to purchase by applying a risk percentage to your total investment. It uses the formula: Position Size = (Risk Amount / (Entry Price - Stop Loss Price)), where Risk Amount is the portion of your portfolio you're willing to lose on a trade. For example, if you risk 2% of a $10,000 portfolio ($200) and set a stop-loss $5 below your entry price, you'd buy 40 shares ($200 / $5). This ensures consistent risk management across trades regardless of stock price or position size.
Practical Applications
To use this calculator, input your total investment amount, desired risk percentage (e.g., 1-3%), your entry price, and stop-loss level. The tool instantly computes how many shares to buy, preventing emotional overexposure. For instance, if Apple stock is $150 per share with a 2% risk on a $5,000 portfolio and a $7.50 stop-loss distance, the calculator recommends 13 shares (total risk $97.50). This method standardizes position sizing and aligns with systematic trading strategies.
Day-to-Day Use
This calculator simplifies daily trading decisions by automating risk calculations, helping you stick to disciplined strategies even during volatile market conditions. Instead of guessing position sizes, you can quickly assess how many shares fit your risk tolerance before placing orders. For example, if a stock's volatility increases, you can instantly adjust your position size to maintain consistent risk exposure, reducing the chance of large losses and protecting your portfolio from emotional trading mistakes.
FAQ
Always size?
Position sizing is risk management.