Position Size Calculator
Calculate an estimated trading position size based on your account balance, risk percentage, entry price and stop-loss price. Use position sizing to help keep risk consistent across trades.
Enter Trade Details
Calculation Results
Risk Amount = Account Balance × Risk %
Price Distance = |Entry − Stop-Loss|
Position Size = Risk Amount ÷ (Price Distance × Value Per Unit)
What Is Position Sizing?
Position sizing is a risk-management method used to determine how much of an asset or financial instrument to trade. Instead of selecting a position size arbitrarily, traders can calculate a position based on their account size, acceptable risk and stop-loss distance.
The farther the stop-loss is from the entry price, the smaller the position may need to be if the trader wants to keep the same maximum monetary risk.
Why Position Size Matters
A consistent position-sizing approach can help traders avoid taking disproportionately large positions after a winning or losing trade. It can also make risk easier to compare across different setups.
- Defines a maximum planned monetary risk.
- Links position size to stop-loss distance.
- Helps maintain more consistent risk between trades.
- Can be used as part of a broader trading plan.
How This Calculator Works
First, the calculator determines the amount you are willing to risk using your account balance and risk percentage. It then measures the price distance between your entry and stop-loss. The risk amount is divided by the potential loss per unit to estimate the position size.
Position Size Calculation Example
Suppose a trader has a $10,000 account and decides to risk 1% on a trade. The planned risk is therefore $100.
If the entry price is 2,000 and the stop-loss is 1,990, the price distance is 10. If each unit loses $1 for every 1.00 price movement, the estimated position size is:
$100 ÷ (10 × $1) = 10 units
The exact position size you can trade depends on the instrument, broker contract specifications, tick or pip value, account currency, leverage and other trading conditions.
Position Size and Risk Management
Position sizing should be considered together with stop-loss placement, account equity, trading costs and the characteristics of the instrument being traded.
Forex
Forex position sizes are commonly expressed in lots. Pip value, currency conversion and contract size can affect the actual monetary risk.
Gold and Commodities
Gold and other commodities may use contract specifications that differ between brokers. Tick size, contract size and the instrument's quote convention should be checked before placing a trade.
Stocks
For stocks, position size is commonly expressed as the number of shares. The potential loss can be estimated from the difference between entry and stop-loss multiplied by the number of shares.
Crypto
Cryptocurrency position sizes may be expressed in coins or units. Exchange contract specifications, fees and minimum order sizes should be considered.
Common Risk Percentages
| Risk | Account Example | Maximum Planned Risk |
|---|---|---|
| 0.25% | $10,000 | $25 |
| 0.50% | $10,000 | $50 |
| 1% | $10,000 | $100 |
| 2% | $10,000 | $200 |
These percentages are examples rather than recommendations. Your appropriate risk level depends on your own trading plan, objectives, financial circumstances and risk tolerance.
Related Trading Calculators
Frequently Asked Questions
What is a position size calculator?
A position size calculator estimates how large a trading position can be based on factors such as account balance, risk percentage, entry price and stop-loss distance.
How do I calculate position size?
A basic calculation divides the amount you are willing to risk by the potential loss per unit. The potential loss per unit is based on the distance between entry and stop-loss multiplied by the value per price unit.
What does 1% risk mean?
A 1% risk level means the planned maximum loss is equal to 1% of the account balance or equity used in the calculation. For example, 1% of $10,000 is $100.
Can I use this calculator for forex?
Yes, but forex traders should convert the result into the correct lot size using the broker's contract size and pip-value specifications.
Can I use it for XAUUSD?
It can be used as a general position-sizing framework for XAUUSD, but the value-per-price-unit must match your broker's XAUUSD contract specifications.
Does position sizing guarantee a fixed loss?
No. Slippage, spreads, gaps, commissions and execution conditions can cause the actual result to differ from the calculated amount.