Position Size Calculator
How many shares to buy so that hitting your stop costs exactly what you decided to risk, and no more.
Position size is set by the stop distance, not by conviction. A tight stop allows a larger position for the same dollar risk, and a wide stop demands a smaller one. The break-even win rate is the percentage of trades you must win at this reward-to-risk ratio just to avoid losing money.
Position size should be derived, not guessed. Choose the fraction of your account you are willing to lose on one trade, divide that by the distance from entry to stop, and the result is the number of shares. Risking 1% of a $50,000 account with a $2 stop distance means 250 shares, whatever the share price happens to be.
Frequently asked questions
What percentage should I risk per trade?
One to two percent of account value is the common guideline among active traders. At 1%, a run of ten consecutive losses costs about 10% of the account, which is survivable. At 10% per trade, the same streak is close to fatal.
What is a good reward-to-risk ratio?
Many traders want at least 2:1, meaning the target is twice as far as the stop. The ratio also sets how often you must be right: at 2:1 you break even winning a third of the time, while at 1:1 you need better than half.
Should the stop be a percentage or a price level?
A price level tied to the chart or the thesis is generally better than a round percentage, because the market does not know where your arbitrary 8% line sits. Place the stop where the reason for the trade would be proven wrong, then size to it.
What if the position is too large for my account?
If the calculated shares exceed what you can fund, the stop is too tight relative to the account or the risk percentage is too high. Widen the stop and accept fewer shares, or skip the trade.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.