Stocks calculator
Position size calculator
Calculate the correct number of shares or CFD units for any trade based on your account size, risk tolerance, and stop loss level.
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How do I calculate position size for stocks?
Position size (shares) = Risk amount / Risk per share. Risk amount = Account size x Risk %. Risk per share = Entry price - Stop loss price. With a $10,000 account risking 1% ($100), entry at $50, stop at $48 ($2 risk per share): $100 / $2 = 50 shares. Total position value is 50 x $50 = $2,500 — but your maximum loss if the stop is hit is only $100.
Why is position sizing important in trading?
Position sizing determines how much capital is at risk on every trade. Even a strategy with a 60% win rate can destroy an account if individual position sizes are too large. Correct position sizing ensures that a normal losing streak — which every strategy experiences — does not cause irreparable damage to your account. It is the variable you control completely, unlike market direction.
How does leverage affect my position size calculation?
Leverage amplifies the size of your position but does not change your dollar risk. Always calculate position size from your account balance, risk percentage, and stop loss distance first — then determine if leverage is needed to take the full position. Using leverage to increase your position beyond what your stop loss calculation allows means you are risking more than your plan intends.
What percentage of my account should I risk per trade?
Most professional traders risk 0.5% to 2% per trade. At 1% risk, you can absorb a long losing streak before reaching a serious drawdown. At 5% risk, the same drawdown arrives after only a handful of losses. Beginners should start at 0.5% to 1% until they have a statistically significant sample of trades to evaluate their strategy.
What if my calculated position size is too large for my account?
You have three options: reduce your risk percentage (for example from 2% to 1%), widen your stop loss to reduce the number of shares required, or skip the trade and wait for a setup with a tighter stop. Never increase your risk percentage to force a trade — the calculator is showing you that the setup does not fit your account size at current parameters.
What is ATR-based position sizing for stocks?
ATR (Average True Range) measures a stock's recent daily price range in dollars. Setting your stop at 1.5x to 2x ATR places it outside normal daily noise, reducing the chance of being stopped out before your thesis plays out. Your position size then adjusts so your dollar risk stays constant.
Can I use Kelly Criterion for stock position sizing?
Yes. Enter your historical win rate and average win/loss in dollars. Kelly calculates the optimal fraction of your account to risk. You still need a stop loss — Kelly sets the risk fraction, the stop loss price determines how many shares that translates to. Most traders use Half Kelly to reduce drawdown.
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