How does the position size calculator work?

It divides the amount you are willing to lose on the trade by the loss per unit if your stop is hit. For shares that is the distance between entry and stop. For futures it is that distance times the contract's point value, and for forex it is the distance in pips times the pip value per lot. The result is rounded down so the loss never exceeds your budget.

How much of my account do traders usually risk per trade?

Many traders use a fixed fraction of the account per trade, commonly somewhere between 0.5% and 2%. A fixed fraction means losses shrink as the account shrinks, which makes a losing streak easier to survive. The right figure depends on your goals, strategy and tolerance for drawdowns.

Why size from the stop rather than a fixed number of shares?

A fixed number of shares means the amount at risk changes with every trade's volatility and stop distance. Sizing from the stop keeps the loss per trade constant, so a wide stop gives a smaller position and a tight stop a larger one.

Does the calculator include fees, slippage or gaps?

No. The amount at risk assumes the stop fills at its price. In fast markets or over weekend gaps, fills can be worse, and commissions add to the cost.

What is a conviction sleeve?

It is the part of a portfolio set aside for a small number of concentrated, higher-conviction bets, kept separate from the long-term core. Capping the sleeve and the risk per bet limits how much any one idea can hurt the whole portfolio.

Tools › Position size calculator

Position Size Calculator

Work out how many shares, contracts, lots or coins to trade so that a stop-out loses exactly the amount you chose. Works for stocks, ETFs, futures, forex and crypto.

Position size200 shares

Position value: $10,000
Share of account: 10.0%
Amount at risk: $1,000
Risk budget: $1,000
Risk per unit: $5.00
Reward : risk: 3.0 : 1

Risking 1.00% of a $100,000 account ($1,000) with a stop below a 50.00 entry at 45.00 gives a position of 200 shares, worth $10,000 (10.0% of the account). If the stop is hit, the loss is about $1,000 before fees and slippage. If the target is reached, the gain is 3.0 times the amount at risk.

Risk budget for your conviction bets

Keep long-term holdings and concentrated bets apart. Set the size of your conviction sleeve and the most any single bet may lose, then list your open or planned bets to see how much of the budget they use.

Conviction sleeve: $50,000
Max risk per bet: $1,000
Total risk budget: $5,000
Risk in use: $2,795
Remaining budget: $2,205

Bet	At risk	% of sleeve	Check
Gold miners ETF	$875	1.8%	Within limits
Long-dated Treasuries	$720	1.4%	Within limits
Copper futures ETF	$1,200	2.4%	Risks $1,200, above the $1,000 per-bet limit.

What position sizing is

Position sizing decides how much of an asset to buy or sell. Sizing from risk turns that around: you first decide how much you are prepared to lose if the idea is wrong, then set a stop where the idea is invalidated, and the size follows from the two.

The result is that every trade risks the same amount regardless of how volatile the asset is or how far away the stop sits. A losing streak costs a predictable amount, and no single position can do outsized damage.

Method

Worked example

Sizes are rounded down to whole shares or contracts, to 0.01 lots for forex and to 0.000001 for crypto, so the actual amount at risk is never above the budget. The calculation ignores commissions, slippage and gaps.

This is Step 4 of The MacroInsight Process: conviction bets. Concentrated bets, each sized deliberately and each with a written invalidation point.