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Position-size calculator

Whether you survive a bad stretch depends above all on the size of your positions. The entry price matters much less. This calculation turns the usual order around. First you decide how much you're risking, and the number of shares follows from that.

How this is calculated

What it calculates

How many shares you should buy at most so that a triggered stop-loss costs exactly the risk you set in advance.

Your inputs

  • Account size: your total trading capital.
  • Risk per trade, in percent: the share of your account you are willing to lose on a losing trade.
  • Entry price and stop-loss price: the gap between them decides how much you risk per share.
  • Target price (optional): for the potential gain and the risk-reward ratio.

The calculation

Risk in € = account size × risk %
Distance = |entry − stop|
Shares = risk in € ÷ distance
Capital deployed = shares × entry
Distance to stop in % = distance ÷ entry

With a target price, additionally:

Potential gain = shares × |target − entry|
Risk-reward ratio = 1 : (potential gain ÷ risk in €)

The number of shares is not rounded to whole shares (fractional shares; below one share, up to 4 decimal places). If the capital deployed would be larger than your account, the calculator warns you: that would only work with leverage. Assumptions: the stop fills exactly at the stop price, with price gaps the loss can be larger. Fees are not included.

What the result means

What's fixed here is the loss if you're wrong, the number of shares adjusts. If the stop is far away, you buy less. If it's close, you buy more. That way every losing trade costs the same, whatever the chart looks like.

Example

Default values: €5,000 account, 1% risk, entry €50, stop €47. Risk: €50. Distance: €3 (6%). Shares: €50 ÷ €3 = 16.7. Capital deployed: about €833. With a target of €56, 16.67 × €6 = €100 would be possible. A risk-reward ratio of 1 : 2.

This calculator says nothing about whether a trade is a good idea. It only limits what a single mistake can cost.

The full explanation is in the lesson Calculating position size.

Frequently asked questions

What's the basic formula for share count?

The allowed loss in money divided by the distance between entry and stop per share.

What happens if you set the stop tight just to make the position bigger?

The position will very likely be stopped out by completely normal swings.

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