Position Sizing Calculator
Position Sizing Calculator
Calculate optimal trade quantity based on your risk budget.
Optimal Position Size (Shares)
400
Total Capital Risked
₹2,000
Total Trade Exposure
₹60,000
What to do next
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Risk-Based Position Size Formula
Calculates exact share quantities to buy per trade based on risk budget and stop-loss spreads.
Worked Example: ₹2 Lakhs balance, 1% risk budget. Entry: ₹150, Stop Loss: ₹145
Position Sizing: Aligning trade volume with risk budget limits
Vikram had a ₹2 Lakhs trading account and risked a maximum of 1% (₹2,000) per trade. He planned to enter a trade at ₹150 with a stop loss set at ₹145.
By dividing his ₹2,000 risk budget by the ₹5 risk per share, he determined his optimal position size was to buy 400 shares, representing a total trade exposure of ₹60,000.
Position sizing calculates exact trade volumes to ensure that a hit stop loss never exceeds your personal account risk budget.
Never allocate position sizes based on gut feel. Proper sizing is the single most important component of long-term trading survival.
Frequently Asked Questions
Why is position sizing important?
Position sizing dictates how many shares you buy. It ensures that even if your stop loss is hit, your total account loss stays within your predefined risk limit (e.g., 1%).
Should I risk the same percentage on every trade?
Generally, yes. Consistently risking 1% to 2% of your account per trade ensures that a string of losses will not wipe out your trading capital.
How does volatility affect position sizing?
Highly volatile stocks require wider stop losses. With a wider stop loss, your position size must be smaller to maintain the same total risk amount.
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