Position Sizing Calculator: How to Trade Smarter and Protect Your Capital

Position Sizing Tool – Calculate the Perfect Trade Size

Before entering any trade, knowing the correct position size is critical. Many traders focus only on finding the right stock or timing the market, but they ignore how much to invest. Position sizing ensures you never risk too much on a single trade and helps preserve your capital for the long run.

What Is Position Sizing?

Position sizing refers to determining the number of shares or contracts to buy based on your account balance, risk percentage, and stop-loss distance. It connects your trading strategy with risk management, ensuring that no single loss will wipe out your account.

How This Tool Works

Our Position Sizing Calculator helps you instantly calculate the ideal trade size:

• Enter your account balance.
• Decide your risk % per trade (commonly 1–2%).
• Provide the entry price and stop-loss price.
• The tool will calculate how many units (shares/lots) you can buy safely.

Position Sizing Calculator

Account Balance ($): Risk % per Trade: Entry Price: Stop-Loss Price:

Case Study: Applying the Tool

Imagine you have an account balance of $10,000 and decide to risk 2% per trade. Your entry price for a stock is $50, and your stop-loss is $48.

• Risk amount = $10,000 × 2% = $200
• Risk per share = $50 – $48 = $2
• Position size = $200 ÷ $2 = 100 shares

So, you should buy 100 shares. This way, if the stop-loss is hit, you only lose $200, keeping your account safe.

Why Position Sizing Matters

Without proper position sizing, traders either over-expose themselves to losses or underutilize opportunities. It ensures consistent risk, emotional control, and long-term account growth.

Related Tools

Combine this tool with:

• Pivot Point Calculator – to identify entry and exit levels.
• Risk Calculator – to define your loss limits clearly.

Conclusion

Position sizing is the bridge between strategy and risk management. Use this calculator before every trade to ensure your capital is protected and your trading decisions remain disciplined.

💬 Try the tool and share your results in the comments. How do you currently decide your position size?