What is a position size calculator?
Every trade can go wrong. A position size calculator makes sure that when it does, the damage is small and planned. Instead of buying a random number of shares, you decide how much of your capital you're willing to lose — say 1% — and where your stop-loss goes. The calculator then tells you the exact quantity, so a stop-loss hit costs you that amount and no more. Traders who survive long term almost always follow this rule.
How to use it
- Enter your trading capital — the money in your trading account.
- Choose how much to risk per trade, as a percentage or a fixed rupee amount.
- Enter your entry and stop-loss prices. A stop below entry means a long (buy) trade; above entry means a short (sell) trade.
- Add a target to see the reward-to-risk ratio and potential profit.
Position size formula
Quantity = (Capital × Risk %) ÷ |Entry − Stop-loss|
Example
You have ₹1,00,000 and risk 1% per trade, so your maximum loss is ₹1,000. You want to buy a stock at ₹500 with a stop-loss at ₹490 — a risk of ₹10 per share. Quantity = 1,000 ÷ 10 = 100 shares, a position worth ₹50,000. If the stock hits a target of ₹530, you make ₹3,000 — three times what you risked (a 1:3 reward-to-risk trade).
Why fixed-risk sizing works
- Consistent losses: every losing trade costs about the same, so one bad trade can't wipe you out.
- Tight stops = bigger size: a closer, logical stop lets you buy more shares for the same risk.
- Emotion-free: the quantity comes from rules, not from how confident you feel.
- Pair it with a good ratio: aim for trades where the target is at least twice the risk — check with the risk-reward calculator.
Remember to include brokerage and taxes — see the brokerage calculator.
Disclaimer: Results are estimates for educational purposes only and are not financial, investment or tax advice. Please verify with your bank, broker or a SEBI-registered adviser before acting. Read the full disclaimer.