Position Size Calculator – Size Every Trade From Your Stop-Loss
A position size calculator answers the question to ask before every trade: how big can this position be so that, if the stop-loss is hit, I lose only the amount I chose? You enter your balance, the risk per trade, an entry and a stop. The calculator returns the largest number of shares, forex lots or futures contracts that stays inside that budget, after commissions and slippage.
The position sizing formula
Three lines do the work:
risk budget = balance × risk %risk per unit = |entry − stop| × value of a 1.0 move + costssize = risk budget ÷ risk per unit, rounded down
Take a 25,000 account risking 1%: the budget is 250. Buying at 50.00 with a stop at 48.00 loses 2.00 per share, so the position is 250 ÷ 2 = 125 shares, worth 6,250. With a target at 56.00 the trade makes 750, a 3 : 1 reward-to-risk ratio. It breaks even over many trades if at least 250 ÷ (250 + 750) = 25% of them win. Add a win rate and you also get the trade's expectancy, a special case of the expected value over two outcomes.
The trade ladder draws this plan as a price diagram: the red band between entry and stop is the money at risk, the green band up to the target is the reward, and dotted lines mark each whole multiple of risk (1R, 2R, 3R…).
A wider stop means a smaller position
Double the stop in the example to 4.00 and you can buy only 62 shares; halve it to 1.00 and you can buy 250. The loss at the stop stays about 250 either way, so place the stop where the idea is proven wrong and let the calculator set the size. For ATR-based stops, enter k × ATR as the distance.
Fixed-fractional risk and losing streaks
Risking a fixed percentage of the current balance is called fixed-fractional sizing. The stress test shows why the percentage matters more than any single trade:
| 10 losses in a row | Balance left (from 25,000) | Drawdown | Gain to recover |
|---|---|---|---|
| 1% per trade | 22,609.55 | 9.56% | +10.57% |
| 5% per trade | 14,968.42 | 40.13% | +67.02% |
Recovery always needs a bigger gain than the loss, because the gain is earned on a smaller balance: 1 ÷ (1 − drawdown) − 1.
Forex: pips, lots and pip value
A pip is 0.0001 on most pairs and 0.01 on JPY-quoted pairs. A standard lot is 100,000 units, so one pip is worth 10 units of the quote currency per lot. With a USD account on EUR/USD, that is $10.00 per lot: risking $100 on a 30-pip stop gives 0.33 lots. On USD/JPY at 150.000 a pip is ¥1,000 ÷ 150 = $6.67. On a cross such as EUR/GBP you also need the GBP/USD rate, which you type in: at 1.27500 a pip is worth $12.75 per lot.
Futures ticks and micro contracts
Futures move in ticks with a fixed dollar value. One ES tick (0.25) is $12.50, so a 10-point stop risks $500 per contract. A $50,000 account risking 1% can hold exactly one contract. Add $4.50 of commission and even one contract is over budget. The micro contract (MES) is one tenth the size, so it lets small accounts size precisely.
Leverage vs risk
Leverage changes the margin you post, not what you lose at the stop. A 0.0625 BTC position with a 1,600 stop distance loses $100 at 10× or at 50×. At 50× the rough liquidation price moves above the stop, so the exchange would close you out first.
Costs and slippage
Commissions and slippage come out of the risk budget, so the loss at the stop really is the loss. Adding a 2.00 fixed commission, 0.01 per share and 0.05 of stop slippage to the first example makes each share risk 2.06: the size drops to 120 shares and reward-to-risk to 2.88 : 1.