Inputs
Result
- Position size
- 50.0000 units
- Dollar risk
- $100.00
- Risk per unit
- $2.0000
- Position value
- $5,000.00
- Effective leverage
- 0.50×
How position sizing works
The formula is brutally simple:
Position size = (Account balance × Risk %) ÷ (Entry − Stop)
If your account is $10,000, you risk 1% ($100), and your stop is $2 below entry — you can buy 50 units. That's it. The math doesn't care if you're trading shares, lots, or contracts. The unit just changes meaning.
FAQ
What risk percentage should I use per trade?
Most professional traders risk 0.5% to 2% per trade. 1% is the safe default — it lets you survive a 10-loss streak with only a 10% drawdown.
Does this work for forex lots?
Yes. Use price levels (e.g. 1.0850 entry, 1.0820 stop) and the result tells you units. Divide by 100,000 for standard lots, 10,000 for mini, 1,000 for micro.
What about futures contracts?
Use point values. Each ES point = $50, NQ point = $20, CL point = $1,000. Treat 'units' as contracts and adjust your stop in points × point value.
Calculating size before every trade is step one. Step two is logging the trade so you can prove your edge. Open the free journal →