Before placing any trade, you must know exactly how much you could lose if the market moves against you. A disciplined risk plan prevents one bad trade from damaging your entire portfolio, and turns trading into a repeatable process. Use the calculator below to set a safe risk per trade and size your position intelligently.
This article is part of our Trading Tools section. For better entries and exits, also use the Pivot Point Calculator.
What Is Risk in Trading?
Risk is the potential loss you accept on a single trade. It is usually defined as a fixed percentage of your account balance (e.g., 1–2% per trade). By capping risk this way, you ensure that a losing trade remains manageable and your capital can recover.
About This Risk Calculator
This tool calculates two essential values from four simple inputs:
- Maximum Loss ($): your account balance × chosen risk %.
- Recommended Position Size: how many shares/contracts to buy or sell so that the loss at the stop equals your maximum loss.
Inputs required: Account Balance, Risk %, Entry Price, and Stop Loss Price. If you prefer to size positions by pips/points instead of prices, use our Position Sizing Tool.
How It Works (Formula)
Max Loss ($) = Account Balance × (Risk % ÷ 100).
Risk per Unit = |Entry Price − Stop Loss Price|.
Position Size = Max Loss ÷ Risk per Unit (rounded down to the nearest whole unit).
💡 Pro Tip
Set stops and targets near realistic market levels using the Pivot Point Calculator. Then confirm your dollar risk below before executing the trade.
Case Study: Applying Risk Like a Pro
Imagine you have an account balance of $10,000 and you risk 2% per trade. Your planned long entry is at $50.00 with a stop loss at $48.00. The risk per share is $2.00. Your maximum loss is $10,000 × 2% = $200. Therefore, the recommended position size is $200 ÷ $2 = 100 shares. If the stop is hit, you lose $200—exactly your planned risk—no more.
Before placing the order, check nearby levels using the Pivot Tool. If a strong support sits at $48.20, you might tighten the stop to $48.15 to remain below that level; if strong resistance is near $51.00, you might place a partial take-profit there. For alternative markets (forex/indices) where you size by pips/points, switch to the Position Sizing Tool.
Risk Calculator
Enter your details and click Calculate. Results show your maximum dollar loss and a suggested position size.
Why This Matters
Without a strict risk cap, traders tend to oversize positions and move stops emotionally. The calculator enforces discipline: you define your risk first, then let price structure and market levels (support/resistance) guide your stop and target.
Next Step
Confirm nearby support and resistance with the Pivot Point Calculator, and if you size by pips/points, calculate exact contracts with the Position Sizing Tool.
Conclusion
Risk management is the foundation of sustainable trading. By keeping risk per trade small and sizing positions intelligently, you stay in the game long enough to benefit from your edge. Use this calculator before every trade—and combine it with our other tools for a complete, professional process.
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