The formula
Position size = (Account equity × Risk %) ÷ (Entry − Stop) ÷ Contract size
If you risk 1% of a $10,000 account ($100) with a $5 stop, you can hold 20 shares (or 20 units) before the stop hits your planned loss. Leverage is an output of this math — never the starting input.
Why this matters
- Ten losing trades at 1% risk leave you down about 10% — survivable. Ten losers at 10% risk can end the account.
- Volatility changes stop distance; the calculator forces you to resize instead of hoping.
- Read the full framework in Leverage & Risk.
Frequently asked questions
What risk percent should I use?
Many educators suggest 0.5%–2% of equity per trade. Lower is safer during learning. The calculator does not recommend a percent — it only sizes to the percent you choose.
Does this include fees or slippage?
No. Treat fees and slippage as extra stop distance, or reduce size further. The tool is an educational sizing aid, not an order ticket.
Can I use this for forex or futures?
Yes if you express stop distance in account-currency terms per unit (pip value × pip distance, or tick value × ticks). Set contract size to match your instrument’s unit multiplier.