Position Size Calculator (Risk %)
Decide the most you will lose per trade (1–2% of the account is the classic rule). Enter entry and stop prices — the calculator sizes the position so a stopped-out trade costs exactly that.
| Position value | — |
| Risk per share | — |
| Loss if stopped out | — |
| Share of account committed | — |
The position sizing formula
Shares = (Account × Risk%) ÷ (Entry − Stop price)
A $25,000 account risking 1% can lose $250 per trade. With entry $48 and stop $44.50, risk per share is $3.50 → 71 shares (~$3,400 position). If the stop hits, the loss is $250 — planned, survivable, repeatable.
Why the 1–2% rule is about survival math
Losing streaks are certain; account death is optional. Ten straight 1% losses leave 90.4% of the account — annoying. Ten straight 10% losses leave 34.9% — and a 65% loss needs +186% just to recover. Position sizing is the only variable a trader fully controls, which is why professionals size first and pick stocks second.
Details that change the number
- The stop defines the size — never reverse it. Widening a stop to "give it room" without shrinking the position silently multiplies risk.
- Gaps and slippage: stops are not guarantees; earnings-night gaps blow through them. Riskier events deserve smaller size than the formula says.
- Correlated positions stack: five 1%-risk trades in similar tech stocks are closer to one 5% bet.
Frequently asked questions
How do I calculate position size?
Account × risk% ÷ (entry − stop). $25,000 × 1% = $250 of risk; with $3.50 between entry and stop, buy 71 shares.
What is the 1% rule in trading?
Never risk more than 1% of the account on a single trade (some use 2%). It guarantees that even a long losing streak leaves the account alive and recoverable.
Position size and stop loss — which comes first?
The stop. Place it where the trade thesis is wrong (below support, etc.), then let the formula size the position. Choosing size first and fitting a stop after inverts the risk control.
Does this apply to long-term investing?
The formula targets traders using stops. Long-term investors control risk through diversification and allocation instead — no single position so large its failure changes your life.
All Savings & Investing calculators
401(k) Match · APY vs APR · Break-Even Point · CD Ladder · Coast FIRE · College Savings · Compound Interest · Daily Interest · Dividend Income · DRIP · Emergency Fund · FIRE Number · How Long Will My Money Last · Inflation · Investment Fee · Lump Sum vs Dollar-Cost Averaging · Margin & Markup · Millionaire · Net Worth · NPV & IRR · Payback Period · Present Value · Retirement Savings · Retirement Withdrawal · ROI · Roth vs Traditional · Rule of 72 · Savings Goal · Savings Rate · Simple Interest · Social Security Break-Even
Last updated: 2026-07-08