Position Size Calculator

The position size calculator determines how many whole shares match a fixed risk amount per trade in your currency based on the distance between entry and stop-loss prices.

Inputs: Amount — account size (your currency), Risk per trade (%), Amount — entry price, Amount — stop-loss price, Amount — target price (optional).

Default preview ($25,000.00 account, 2% risk, $120.00 entry, $114.50 stop): 90 shares (exact: 90.91), Position value = $10,800.00 (43.20% of account), Actual risk amount = $495.00.

Educational tool. Results are simple calculations based only on the numbers you enter. They are not predictions and not financial advice.

How it works

First, multiplying your account size by your chosen risk percentage gives your maximum risk amount for the trade. Next, taking the absolute difference between the entry price and stop-loss price gives the risk per share. If the stop-loss is below the entry, the setup is a long position; if the stop-loss is above the entry, it is a short position. Dividing risk amount by risk per share gives the exact share count, and rounding down to a whole number yields the whole shares and actual risk amount. Multiplying whole shares by the entry price gives the total position value and its percentage of your account. When you add an optional target price on the profit side, dividing reward per share by risk per share gives the reward-to-risk ratio.

Risk amount = A * p / 100

Risk per share = |E - S| (long if S < E, short if S > E)

Shares = floor(Risk amount / Risk per share)

Position value = Shares * E

Position % of account = (Position value / A) * 100

Actual risk amount = Shares * Risk per share

Reward-to-risk = |T - E| / Risk per share (when target T is entered)

Worked example

Consider a $25,000.00 account risking 2% per trade ($500.00 maximum risk amount) on a long setup with entry at $120.00 and stop-loss at $114.50. The risk per share is |$120.00 - $114.50| = $5.50. Dividing $500.00 by $5.50 yields 90.9091 exact shares, which rounds down to 90 whole shares. That creates a position value of $10,800.00 (43.20% of the account) with an actual risk amount of $495.00.

How to use the result

Compare the whole share count with the exact unrounded share count to see how rounding down affects your actual risk amount in your currency. Check the position percentage of your account to see how much capital the share count requires relative to your starting balance. If the position value exceeds 100% of the account, the calculator flags that holding those shares would require borrowed funds (margin).

Frequently asked questions

Why does the calculator round shares down instead of to the nearest whole number?

Rounding down with floor ensures actual risk amount (Shares * Risk per share) stays less than or equal to your target risk amount. Rounding up would make actual risk amount exceed the percentage risk you entered.

How does the calculator know if a setup is long or short?

Direction is determined solely by comparing the stop-loss price S to the entry price E. If S is lower than E, the trade is treated as long; if S is higher than E, the trade is treated as short.

Why can the position value exceed my total account size?

Share count depends only on risk amount and stop distance, not on the share price alone. When the stop distance is very tight compared to the entry price, Shares * E can exceed A, which the calculator notes would require borrowed money (margin).

What happens if my risk amount is smaller than the risk per share?

When Risk amount divided by Risk per share is less than 1, rounding down gives 0 whole shares, and the calculator displays a notice that your risk amount is too small for even one share at that stop distance.

What rule applies to the optional target price?

A target price must be on the profit side of the entry price: strictly greater than E for a long trade (S < E), and strictly less than E for a short trade (S > E).

Want to practice these ideas without risking money? EquiTrek is an iOS app with a paper-trading simulator.