What is position sizing in trading?

Position sizing is deciding how many shares or contracts to buy so that a single losing trade only costs a predefined, acceptable percentage of your trading capital.

How does a position size calculator work?

It divides the amount of money you are willing to risk (capital multiplied by your risk percentage) by your per-share risk (entry price minus stop-loss) to give the number of shares to trade.

How much should I risk per trade?

A common risk management rule is to risk no more than 1 to 2 percent of your total trading capital on any single trade, which helps protect the account from large drawdowns.

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Trading Tools

Position Size Calculator

Calculate the exact quantity of shares or lots to buy per trade based on your risk tolerance, account size, entry price, and stop-loss criteria.

Risk & Capital Parameters

Total Account Size (₹)

Risk Per Trade (%)1%

0.1%10%

Entry Price (₹)

Stop Loss Price (₹)

Execution Plan

Position Size200 Shares

Risk Amount₹1,000.00

Capital Required₹20,000.00

Stop Loss Pct5.00%

💡 Pro Tip:If the capital required (₹20,000) exceeds your available account size, you will need to scale down your risk percentage, find a tighter stop-loss level, or trade using leverage/margin where appropriate.

Why is Position Sizing Crucial?

Position sizing is the most critical element of risk management in active trading. By determining your position size relative to a fixed percentage of your account size (e.g., 1% or 2%), you insulate your portfolio from catastrophic drawdowns.

For example, risking 1% per trade ensures that you would have to lose 100 consecutive trades to wipe out your capital completely. This allows you to stay in the game and execute your trading edge systematically.