Position Size Calculator - Stocks & Price-Based Units

How to use this tool

1. Choose a sizing method. Select Percent-Risk (most popular), Fixed-Dollar, or Kelly Criterion.
2. Enter account and prices. Input your total account equity, entry price, and stop-loss price.
3. Set risk parameters. Enter your risk amount (dollars or percent of account), or Kelly win probability and win/loss ratio.
4. Optional: add a take-profit. Enter a take-profit price to see the reward-to-risk ratio and potential profit.
5. Review your position size. Review the rounded share or unit quantity, notional value, target risk budget, actual modeled stop risk after rounding, and actual account-risk band.

Why position sizing matters

Position size connects an entry price, a planned stop, and a target loss budget. It does not predict whether a trade will work or prevent losses. If the market moves through a stop, gaps, or fills at a different price, the realized result can differ from this estimate.

Percent-risk method

Percent-risk first turns an account percentage into a target dollar budget. The calculator divides that budget by the absolute price difference between entry and stop:

Target shares = (Account Size × Risk%) ÷ |Entry − Stop Loss|

Select fractional sizing to round down to hundredths of a share or whole sizing to round down to an integer. Actual modeled stop risk is the rounded quantity multiplied by the price distance. It can therefore be below the target budget, and it is zero when no unit fits.

Kelly Criterion

The Kelly Criterion maximises the long-run growth rate of wealth given your win probability (p) and average win-to-loss ratio (R):

f* = (p × R − (1 − p)) ÷ R

The Full, Half, and Quarter shortcuts set the Kelly fraction to 1, 0.5, and 0.25. These values are controls for the calculation, not recommendations. Estimates can change sharply when the assumed win probability or win/loss ratio changes; historical estimates may not describe future results. A non-positive Kelly calculation produces a zero target budget.

Reward-to-risk ratio

A take-profit on the favorable side of entry reveals the reward-to-risk (R:R) ratio. A 2:1 ratio means the target price is twice as far from entry as the stop. In a simplified model with no fees or slippage, the gross break-even win rate is 1 ÷ (1 + R:R), or about 33.3% for 2:1. Real outcomes depend on execution, costs, and the probability of reaching either price.

Common pitfalls

• Ignoring slippage and spread: actual entry and exit prices may differ from quotes.
• Using account equity rather than risk capital: consider your risk of ruin during drawdowns.
• Increasing position size after wins (pyramiding risk) without adjusting the stop.

Fixed fractional vs. fixed dollar

The fixed dollar method risks a constant dollar amount per trade (e.g., always risk $200). It is simple and predictable, making it a good starting point for new traders who want to understand raw dollar exposure.

The fixed fractional (percent-risk) method sets a target budget as a percentage of current account equity. The budget changes when the account value changes, while a fixed-dollar budget stays constant. Neither method limits losses to the calculated amount when fills differ from the assumed stop price.

Stocks and price-based units

This tool calculates share quantities and other price-based units from entry and stop prices. It does not calculate Forex lots or futures contracts. Those markets need additional instrument-specific information; the formulas below explain the concepts only and are not calculated by this tool:

• Forex concept only: lot sizing uses the stop distance in pips and a currency-pair-specific pip value per lot. This calculator has no pair, pip, or lot inputs, so it does not return a lot size.
• Futures concept only: contract sizing uses stop distance in ticks and the contract's tick value. This calculator has no tick-size, tick-value, or contract inputs, so it does not return a contract count.
• Crypto: a price-based unit calculation can use entry and stop prices, but this tool does not model leverage, margin, liquidation, or exchange-specific contract rules.