Trading Risk & Position Size Calculator

How I Size Every Trade

I have been trading since 1999, full-time since 2007, and I have trained over 7,000 students through the 60-Day Trading Bootcamp at Bulls on Wall Street. The single biggest difference between the traders who make it and the ones who blow up is not the setup. It is whether they size the position correctly before they click buy.

Three numbers. All three before every entry.

Position Size = (Account Size x Risk Percent) / (Entry Price minus Stop Loss Price)

A real example

Account $20,000. Risk 1 percent, so $200 is the most this trade can cost me. Entry $45.00. Stop $43.50, tucked under the low of the pullback candle in the Bone Zone, the area between the 9 EMA and 20 EMA on the 5-minute chart. Risk per share is $1.50. $200 divided by $1.50 is 133 shares.

Stock hits $43.50, I am out, loss is $199.50. One percent. A papercut. On to the next setup.

Stop first, then shares

Most traders get this backwards. They pick a share count that feels right and then figure out where the stop goes. Wrong order. The stop defines the per-share risk. The per-share risk defines the share count. Find the level where the trade is wrong, then run the formula. Every time.

The Danny trade

December 2024. Tesla had run over 100 percent off its lows. One of my students, I will call him Danny, had been obsessed with the stock for years. He started buying in the $480s with no stop. Then he added margin. $50,000 in the account became $200,000 of exposure. When Tesla pulled back, that 4x leverage turned a 5 percent stock move into a 20 percent account move. The broker sold him out. Account gone.

Nobody blows up an entire account on bad luck. Full blowups come from leverage, every single time, across 7,000 plus students. This calculator is the circuit breaker that prevents the Danny trade before it happens. Full breakdown in my position sizing guide.

What the Inputs Mean

• Account Balance: actual equity in the account. Not buying power. Margin inflates buying power and the 1 percent rule is always based on real equity.
• Risk Per Trade: start at 1 percent. Half a percent when the market is choppy. I only go to 2 or 3 percent on rare high-conviction setups, and never as a beginner.
• Entry Price: where you plan to get in.
• Stop Loss Price: where the trade is wrong. Below the pullback low or the 20 EMA on a first pullback, whichever is lower.
• Take Profit: your first target. If it does not give you at least 2 to 1 reward to risk, the trade does not qualify.

I also set a max loss per trade and a max loss per day directly inside my brokerage software. Not in my head. In the software. I know myself. My natural state is guns blazing, so I take the decision away from myself at the platform level. Your broker almost certainly has this feature. Use it.

Frequently Asked Questions

How many shares should I buy?

Account size times your risk percent, divided by the distance from entry to stop. $20,000 account, 1 percent risk, $1.50 stop distance: $200 divided by $1.50 is 133 shares. The calculator does this in under five seconds.

What percent of my account should I risk per trade?

One percent. That is the rule Paul Singh drilled into me over AOL Instant Messenger back in 2006 and it has not changed. Half a percent in chop. Two to three percent only on rare high-conviction setups once you have years of data showing you can handle it.

Should I use my buying power or my account balance?

Account balance. Always. Margin inflates your buying power and makes the share count look reasonable when it is not. The Danny trade happened because $50,000 of real equity was controlling $200,000 of stock.

What if my stop is too far away and the share count is tiny?

Then the stock is wrong for your account size. A $5 stop on a $200 stock gives a $10,000 account 20 shares, not enough to learn from. Match the stock price to a stop distance that keeps the share count workable. Under $10,000, that usually means lower-priced stocks with tighter stops.

Is this calculator free?

Yes. No signup, no card. It is the same math I use before every entry and I want my students using it before theirs.

Related Tools

• Break-Even Calculator: What it takes to get back after a loss
• Trade Journal: Log the setup and the feeling on every trade
• P&L Calculator: Exact profit or loss on a trade