Position Size Calculator
Calculate an illustrative trading position from a predefined monetary risk limit and your stop-loss distance.
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How this tool works
Calculate an illustrative trading position from a predefined monetary risk limit and your stop-loss distance. Inputs should represent your own assumptions, current instrument specifications and account denomination; no automatic market-data feed is used unless the page explicitly states otherwise.
Position quantity = (account balance × risk %) ÷ (absolute entry–stop distance × value per price point per unit × currency conversion rate).
Worked example
With a £10,000 account, 1% risk, £100 entry and £95 stop, the maximum position before costs is 20 shares.
What to check before relying on a result
Check the direction of the trade, units and currency, market contract specifications, realistic spreads and slippage, execution conditions, any applicable taxes and fees, and whether the assumed model fits your instrument. A calculator does not eliminate market risk.
Frequently asked questions
Can I use this for forex?
Yes. Select a standard, mini or micro lot configuration and enter the value of one quote-currency unit in your account currency.
Does a stop-loss guarantee my maximum loss?
No. Gaps, slippage, commissions and execution conditions can make realised losses exceed the planned amount.
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Explore professional trading courses →How do you calculate trading position size?
Start with a predetermined monetary risk budget, then divide that amount by the price movement between entry and stop, adjusted for the instrument's contract multiplier and currency conversion. The resulting quantity is a risk-based ceiling, not a recommendation to place that trade. Check purchasing power and round to an executable unit.
How to use this calculator correctly
- Step 1. Set the account balance and maximum percentage at risk before assessing the trade.
- Step 2. Choose the instrument unit: shares, crypto units, forex lot size or a custom futures multiplier.
- Step 3. Enter a realistic entry and stop price, including a quote-to-account conversion rate where the currencies differ.
- Step 4. Include expected costs, then compare the calculated quantity against margin, liquidity and broker minimums.
Worked comparisons
These are illustrative arithmetic examples, not forecasts or market quotations. They help show how changing one input affects the result.
| Scenario | Risk budget | Stop distance | Maximum units before costs |
|---|---|---|---|
| £10,000 account; 1% risk; share £100 → £95 | £100 | £5 / share | 20 shares |
| £10,000 account; 0.5% risk; share £100 → £95 | £50 | £5 / share | 10 shares |
| £10,000 account; 1% risk; share £100 → £90 | £100 | £10 / share | 10 shares |
How to interpret the results
If the stop is twice as far away but the risk budget is unchanged, the quantity ordinarily halves. A wider stop is not automatically safer: the entry, instrument volatility and the probability of a gap still matter. For a long trade, stops normally sit below entry; for a short, above. The tool models both using absolute price distance, so you must independently check direction and execution assumptions.
Common mistakes and limitations
- Do not treat the calculated size as permission to use leverage; buying power and actual permitted order size may be lower.
- A stop order can execute beyond the requested level during volatility, producing a loss larger than the modelled risk.
- Check quotation conventions, especially forex base/quote currency and contract multipliers; never apply a share-sized unit to a futures contract.
Further questions
Is position sizing the same as margin calculation?
No. Position sizing limits planned loss at a stop; margin is the collateral a broker requires. Both constraints must be checked independently.
Should I round position size up or down?
For risk-controlled sizing, round down to an executable quantity and recalculate total risk including transaction costs.
Does 1% risk mean I lose at most 1%?
No. It is an intended risk budget calculated using an assumed stop fill. Realised execution can be worse.
Related Traders MBA learning
Explore the methodology and related calculations in these directly relevant resources:
Figures are illustrative and depend on input assumptions. This material provides general education, not financial advice, trading signals or a forecast. Verify instruments, exchange or broker terms and execution costs before relying on a calculation.