Position Size Calculator
Position size is the output of your risk rule, not a guess. Enter account size, the percentage you are willing to lose, your entry and your stop, and this returns the exact share count that makes the stop cost precisely that amount.
The formula
Shares = (account × risk %) ÷ |entry − stop|. Everything else on this page is commentary.
In the default: 1% of $25,000 is $250 of risk budget, and the stop is $4.50 away from entry, so 55 shares. That is a $4,620 position — 18% of the account — risking $247.50. The position value and the risk are completely different numbers, and confusing them is the single most common sizing error.
Position size is an output, never an input
The usual sequence is backwards: pick a number of shares that feels right, then place a stop where the chart suggests, then discover what you are risking. Done in that order, risk varies wildly from trade to trade and the trades where you happened to size up are the ones that determine your year.
Reverse it. The account and the risk percentage are fixed by your rules. The stop is set by the trade's structure. Share count is whatever those three imply. A tight stop produces a large position, a wide stop a small one, and both risk the same dollars — which is the entire point.
Watch the % of account line
Risking 1% is not the same as committing 1%. Tighten the stop in the default to $83 and the calculator returns 250 shares — a $21,000 position, 84% of the account, still risking $250. On paper that is within your rules. In practice an overnight gap through the stop does not care about your rules, and a position that size can lose far more than 1% in a single move. If the position value line looks uncomfortable, widen the stop or reduce the risk percentage.
Why 1–2%
It is not magic, it is arithmetic about survival. At 2% a trade, ten consecutive losses cost about 18% of the account — painful and recoverable. At 10% a trade, the same streak costs 65%, and recovering from that needs a 186% gain. The drawdown recovery calculator shows how fast that asymmetry gets out of hand, and the losing streak calculator shows that ten in a row is not rare.
Why a fixed fraction
Sizing as a percentage of capital rather than in fixed dollars is the shape Kelly established in 1956: the growth-optimal bet is a fraction of the bankroll, so it scales with the account automatically.[1] Most traders should sit well below that optimum, which is what a 1–2% rule does.
The number is the easy part
Everything above is arithmetic, and anyone opening this page gets the same answer. What no calculator can settle is whether you took the trade on these terms, or are describing — afterwards — the version of it that worked out.
That is what a trade recorder is for: the trade committed before it resolves, timestamped and sealed on the spot, on a Merkle-anchored log a stranger can check without kappi's cooperation. The plan you typed here stops being a plan you remember having. $15/month, no free tier.
Sources
Frequently asked questions
How do I calculate position size?
Multiply account size by your risk percentage to get a dollar risk budget, then divide by the per-share distance between entry and stop. The result is your share count.
What percentage should I risk per trade?
Most risk frameworks land on 1–2% of account equity. The reasoning is survival arithmetic: at 2%, a ten-loss streak costs about 18% and is recoverable; at 10% it costs 65% and needs a 186% gain to undo.
Is risk the same as position size?
No. Risk is what you lose if the stop is hit; position size is the total capital committed. A tight stop can produce a very large position that still risks only 1%.
What if the stop gaps through my price?
Then the realised loss is larger than calculated. This is why position value matters as well as risk — a huge position with a tight stop is exposed to overnight gaps regardless of where the stop sits.