Most pros risk 0.5–2% per trade. Above 2% is aggressive.
For longs, stop is below entry. For shorts, stop is above entry.
Shares to buy
—
Dollars at risk
—
Total position value
—
Position as % of account
—
How this calculation works
The formula is straightforward: shares = (account × risk%) ÷ |entry − stop|.
The intuition: you decide the maximum dollar amount you're willing to lose on this trade (account size × risk %). You then divide that by the per-share loss you'd take if the stop is hit (entry minus stop). That gives you the share count where, if the stop fires, you lose exactly the dollar amount you committed to risk.
Why most retail traders skip this math
Because it feels limiting. A $10,000 account risking 1% per trade can only afford ~333 shares of a $100 stock if the stop is $3 away. That's $33,333 of position size — more than the account itself. The math forces you to confront leverage, which most retail traders prefer to ignore until they blow up.
The boring truth: traders who position-size consistently survive. Traders who don't, don't. There's no third category.
A few rules of thumb
Never risk more than 2% per trade. The math of recovery from large losses is brutal: a 50% drawdown requires a 100% gain to break even. Keep individual losses contained.
If the stop is so far from entry that the share count drops to single digits, your position thesis is too aggressive. Tighter stop, or different entry.
Position size should not depend on conviction. Risk per trade is a system variable, not a vibe-based decision. "I'm really sure about this one" is exactly when traders blow up.
Want to track whether your sized positions actually work?SultraxAI logs every BUY/SELL signal it fires and publishes the back-tested win rate. Currently 50.4% at 1h across 371 signals — published, not advertised.