Position Size & Risk Calculator
Stop guessing how many shares to buy. Enter your account size, the percentage you are willing to risk, your entry and your stop-loss — and get the exact share count that keeps every loss the same small slice of your capital.
Last updated: June 2026
How it works
Professional risk management flips the usual question. Instead of asking “how many shares can I afford?” it asks “how many shares can I lose on?” The math is simple and the same every time:
1. Dollar risk. Multiply your account by your risk percentage. A $50,000 account risking 1% puts exactly $500 on the line — this is the most you intend to lose if the stop is hit.
2. Per-share risk. Take the distance between your entry and your stop-loss. Buy at $100 with a stop at $95 and you are risking $5 per share.
3. Position size. Divide dollar risk by per-share risk and round down: $500 ÷ $5 = 100 shares. Those 100 shares cost $10,000 to hold, but if the stop hits you only lose the $500 you decided on up front.
Direction is inferred automatically: if your entry is above your stop you are long (betting the price rises, stop below); if your entry is below your stop you are short (betting it falls, stop above). The dollar risk is the same either way — what matters is the distance to the stop.
The 1% / 2% rule
The single biggest reason traders blow up is risking too much per trade. The fix is a hard cap: never risk more than 1–2% of your account on one position. At 1%, you would have to lose roughly 20 trades in a row to draw the account down about 18% — survivable. Risk 10% per trade and four bad calls cut you in half. Small, fixed risk is what lets your edge play out over hundreds of trades instead of ending your account in a handful.
Why fixed-fractional beats a fixed share count
Buying “100 shares every time” is a trap. A trade with a $1 stop and one with a $10 stop look identical in share count but risk ten times as much money. Fixed-fractional sizing holds the dollar risk constant and lets the share count float with the stop distance. Tight stop → more shares; wide stop → fewer shares; same risk on both. Your P&L then reflects the quality of your decisions, not how far away you happened to place a stop.
R-multiples
Once your risk is constant, you can measure every trade in R — one unit of risk. If you risk $500, that trade’s R is $500. A winner that books $1,000 is +2R; getting stopped out is −1R. Thinking in R frees you from dollar amounts and share prices: a strategy that averages, say, +0.4R per trade is profitable whether you trade a $5 stock or a $500 one. Track your trades in R and your edge becomes visible.