Position size calculator
Position size is the money you are willing to lose divided by the distance between your entry and your stop. Risking $100 on a trade whose stop sits $5 below the entry gives a position of 20 units. Enter your numbers below.
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Why the stop sets the size, not the other way round
Most people decide how much to buy first and put a stop wherever leaves the loss tolerable. That inverts the logic. The stop belongs where the idea is actually proven wrong — under the swing low, beyond the level that has held three times — and the size is whatever makes that distance cost what you decided to risk.
Done in that order, a wider stop simply means a smaller position, and you stop being tempted to move the stop because the position is uncomfortably large. More on placing the stop →
What each risk level costs over a losing streak
Losing runs are longer than intuition suggests. Ten losses in a row on a coin-flip strategy happens roughly once every thousand trades — which is a career, not a rarity.
| Risk per trade | After 5 losses | After 10 losses | Gain needed to recover |
|---|---|---|---|
| 0.5% | −2.5% | −4.9% | 5.1% |
| 1% | −4.9% | −9.6% | 10.6% |
| 2% | −9.6% | −18.3% | 22.4% |
| 5% | −22.6% | −40.1% | 67.0% |
| 10% | −41.0% | −65.1% | 186.4% |
The last column is the point. A 65% drawdown does not need a 65% gain to recover — it needs 186%.
Position sizing questions
How do you calculate position size?
Divide the money you are willing to lose by the distance between your entry and your stop. Risking $100 with a stop $5 away gives a position of 20 units. The stop distance sets the size — never the other way round.
What percentage should I risk per trade?
Most professionals risk between 0.5% and 2% of account equity on a single idea. At 2%, a run of ten losses costs about 18% of the account. At 10%, the same run costs 65% and is close to unrecoverable.
Should position size change with conviction?
Sizing up on conviction is how good traders have bad months. Conviction is not measurable and is highest exactly when you are most anchored. Keep risk constant and let the reward-to-risk of the setup do the work.
Does this account for leverage?
It gives you the position value, which is what you need. Whether you reach that value with your own capital or with leverage changes your liquidation price, not your risk — your stop still defines the loss.