How to calculate position size in trading?
To calculate position size: divide your dollar risk by the stop-loss distance. Formula: Position size = (Account × Risk%) ÷ (Entry − Stop). Example: $10,000 account, 1% risk = $100. Entry $50, stop $48, so per-share risk is $2. Position size = $100 ÷ $2 = 50 shares.
More detail
Most disciplined retail traders use 0.5-2% risk per trade. With 2% risk, a string of 10 losses costs about 20% of account.
Volatility-adjusted position sizing using ATR keeps risk constant across instruments with different volatility.
Use our position size calculator for any setup.