Position Size Calculator

Understanding Position Sizing in Trading

Position sizing is the most critical aspect of risk management in trading. It determines exactly how many shares, lots, or contracts you should buy or sell on each trade. Proper position sizing is what separates professional traders from gamblers. It ensures that no single trade can significantly damage your account, while allowing you to maximize returns when you're right.

What is Position Sizing?

Position sizing is the process of determining how much capital to allocate to a specific trade. It answers the fundamental question: "How many units should I buy?" The answer depends on:

• Account size - Your total trading capital
• Risk per trade - The percentage of your account you're willing to lose
• Stop loss distance - How far your stop loss is from your entry
• Entry price - The price at which you plan to enter the trade

The Position Sizing Formula

Why Position Sizing Matters

• Capital preservation - Prevents catastrophic losses from oversized positions
• Consistent risk - Every trade risks the same dollar amount or percentage
• Emotional control - Removes guesswork and impulsive decisions
• Professional approach - Separates systematic traders from gamblers
• Long-term survival - Ensures you stay in the game even during losing streaks

How to Use This Calculator

1. Select your preferred currency using the toggle above ($ USD or ₹ INR)
2. Enter your total account balance
3. Set your risk per trade (1-2% recommended)
4. Set your max position size (10-25% recommended)
5. Enter your planned entry price
6. Enter your stop loss price (must be different from entry)
7. Select your asset type for proper formatting
8. Click "Calculate Position Size" to see your exact position

Currency Support

This calculator supports both US Dollars ($) and Indian Rupees (₹). Simply toggle between currencies using the switch above. Your preference is saved locally and will be remembered across all calculator pages on this site.

Recommended Risk Guidelines

• Conservative traders: 0.5-1% risk per trade
• Moderate traders: 1-2% risk per trade
• Aggressive traders: 2-3% risk per trade (maximum)
• Never risk more than 3% on a single trade

Common Mistakes to Avoid

• Risking too much per trade (>3% of account)
• Using the same number of shares/lots for every trade
• Ignoring stop loss distance when calculating position size
• Exceeding max position size limits
• Not adjusting position size as account grows or shrinks

Remember: Position sizing is not optional - it's the foundation of professional trading. Use this calculator before every trade to protect your capital and ensure long-term survival in the markets.