Trading Position Size Calculator

How position sizing actually works

Position sizing is a division problem, not a guess. First you decide the money you are willing to lose on the trade: account balance multiplied by your risk percentage. Then you measure the distance from your entry price to your stop-loss, which is the money you lose per unit. Divide the first by the second and you have your position size.

Because risk is fixed by the stop-loss, a wider stop always produces a smaller position and a tighter stop a larger one. That is the whole point: the market decides where the stop belongs, and the calculator decides the size that keeps the loss constant.

• Risk amount = account balance × risk % ÷ 100
• Risk per unit = |entry price − stop-loss price|
• Position size = risk amount ÷ risk per unit
• Position value = position size × entry price
• Required margin = position value ÷ leverage

Why leverage does not change your risk

Leverage decides how much cash your broker locks up as margin. It does not decide how much you lose when price reaches your stop — that figure is set by your size and stop distance alone. A 10× account and a 1× account holding the same position lose the same money on the same move.

What leverage does change is survivability. High leverage lets you open a position far larger than your balance, so a normal stop distance can wipe out the account. The calculator flags the moment required margin exceeds your balance so you can see the constraint before your broker rejects the order.

Reading the risk/reward ratio

Add a take-profit price and the calculator returns the reward-to-risk ratio plus the break-even win rate — the percentage of trades you must win for that ratio to be profitable at all. A 1:2 setup breaks even at roughly 33% wins; a 1:1 setup needs more than 50%.

Use it as a filter. If a setup only offers 1:0.8 and your strategy wins half the time, the maths says skip it, however good the chart looks.