Position Size Calculator
Calculate optimal position size based on your risk management rules
Inputs
Recommended: 1-2% for conservative, 2-5% for moderate risk
Position Size Results
Why Position Sizing Matters
Position sizing is one of the most important risk management tools in trading. It determines how much capital you risk on each trade, helping protect your account from large losses.
Key Principles:
- Risk a fixed percentage: Never risk more than 1-2% of your account per trade
- Use stop losses: Always know your exit point before entering a trade
- Calculate before trading: Determine position size based on your stop loss distance
- Stay consistent: Use the same risk percentage across all trades
Frequently Asked Questions
What percentage should I risk per trade?
Most professional traders risk 1-2% of their account per trade. Aggressive traders may go up to 5%, but this significantly increases the risk of large drawdowns. Never risk more than you can afford to lose.
How do I set a stop loss?
Set your stop loss at a logical support/resistance level or based on technical analysis. The distance between entry and stop loss determines your risk per share, which then determines your position size.
Should I adjust position size as my account grows?
Keep the risk percentage constant (e.g., always 2%), but the dollar amount will increase as your account grows. This allows for compound growth while maintaining consistent risk management.