jakup

Total balance in your trading account

%

Share of the account you can lose on one trade (usually 1–2%)

Position size

200 shares

Risk amount100,000
Risk per share500
Position value2,000,000
Weight of account20.00%

What is position sizing?

Position sizing is a money-management method: instead of "how much to buy", you fix the amount you lose if the stop is hit to a set share of your account. The risk amount is divided by the per-share risk (the gap between entry and stop) to get the quantity.

Formula: shares = (account × risk %) ÷ per-share risk. Per-share risk is the difference between entry and stop. Example: account 10,000, risk 1% (100), entry 100, stop 95 → per-share risk 5 → 20 shares. The quantity is rounded down so you never exceed your risk.

Keeping risk at 1–2% means a losing streak will not shake your account much. Longs and shorts are calculated the same way (absolute difference). Fees and slippage are not included — this is a theoretical figure.