Enter your account size, risk tolerance, and stop loss to calculate exact position size, risk/reward ratio, and expected value per trade.
A position size calculator is a tool that determines exactly how many shares, contracts, or lots to trade based on your account balance, risk percentage, and stop loss distance.
Position Size = (Account Balance × Risk %) ÷ (Entry Price − Stop Loss)
Position size is calculated by dividing your risk amount (account size × risk percentage) by the distance between your entry price and stop loss. For example, with a $25,000 account risking 1% ($250) and a $5 stop distance, your position size would be 50 shares ($250 ÷ $5).
Most professional traders risk between 0.5% to 2% of their account per trade. Risking 1% means even 10 consecutive losses would only result in a 10% drawdown, which is recoverable.
Expected value (EV) is the average amount you expect to win or lose per trade based on your win rate and risk/reward ratio. Positive EV means your strategy is profitable over time.
A risk/reward ratio of 1:2 or higher is generally considered good, meaning you stand to gain $2 for every $1 you risk. However, the ideal ratio depends on your win rate.
No. Position size should vary based on stop loss distance to keep your dollar risk consistent. A trade with a tight stop will have more shares than one with a wide stop.
Proper position sizing ensures no single trade can devastate your account. By risking only 1-2% per trade, you can survive long losing streaks that are statistically inevitable in trading.
