Position Size Calculator

The 1% (and 2%) risk rule

Before you can size a position you need to fix the risk amount — the maximum you are willing to lose if the trade is wrong. The cleanest way to set it is as a percentage of your account:

Risk amount = Account size × Risk %

The 1% rule means you never risk more than 1% of your account on any single trade. At 1%, you would need to lose 100 trades in a row to wipe out, which essentially never happens with any real edge. More aggressive traders use 2%, which still gives plenty of room to absorb a normal losing streak. Anything above 2% per trade starts to make drawdowns dangerous — a string of five or six losers, which is completely normal, can dig a hole that is hard to climb out of.

The percentage stays fixed but the dollar figure scales with your balance. After a winning run you risk a little more in absolute terms; after a drawdown you automatically risk less, which is exactly the behaviour you want.

Worked examples by asset class

The formula never changes, but the unit you end up with does. Each example below assumes a $10,000 account risking 1%, so the risk amount is $100 in every case.

Forex

You go long EUR/USD at 1.1000 with a stop at 1.0950 — a 50 pip stop. On a standard lot (100,000 units) each pip of EUR/USD is worth roughly $10, so 50 pips of risk equals about $500 per lot. To cap your loss at $100 you size at $100 / $500 = 0.2 lots, which is 2 mini lots or 20 micro lots (20,000 units). If you only wanted to trade micro lots (1,000 units each), each pip is about $0.10, so 50 pips is $5 of risk per micro lot, and $100 / $5 = 20 micro lots.

Stocks

You buy a stock at $50.00 and set your stop at $48.00. The per share risk is $2.00. Shares = risk amount / per share risk = $100 / $2.00 = 50 shares. That position costs $2,500 to hold, but your actual risk is still only $100 because the stop caps the loss. Notice the position value and the risk are two different numbers — never size off the position value alone.

Crypto

You go long BTC at $60,000 with a stop at $58,000, so the per unit risk is $2,000. Units = $100 / $2,000 = 0.05 BTC. That is a $3,000 notional position, well within a $10,000 account, and the loss is still capped at $100 if the stop triggers. Crypto stops are often wide because of volatility, which naturally forces a smaller position — that is the formula protecting you, not punishing you.

Futures

Futures size in whole contracts, so you work through tick value. Take the E mini S&P 500 (ES), where one tick of 0.25 points is worth $12.50, meaning a full point is worth $50. If your stop is 8 points away, that is 8 × $50 = $400 of risk per contract. With only $100 to risk you cannot trade even one ES contract responsibly — you would either widen the account, tighten the stop, or step down to the Micro E mini (MES) at $5 per point, where an 8 point stop risks $40 per contract and $100 / $40 lets you trade 2 contracts.

Fixed dollar risk vs. percentage risk

This calculator supports both methods, and each has a place. Percentage risk ties your bet to your current balance, so position size grows as you win and shrinks as you lose. It is the better default for a growing account because it compounds gains and brakes automatically during drawdowns.

Fixed dollar risk keeps the same amount on the line every trade regardless of balance. It is useful when you want predictable, stable risk — for example, a prop firm challenge with a hard daily loss limit, or while you are still proving a strategy and want clean, comparable results across trades. The downside is that it does not scale with the account, so a fixed $200 risk that felt sensible at $20,000 becomes reckless if the account falls to $5,000. A common compromise is to use percentage risk as the base and round to a clean fixed figure per trade.

Common position-sizing mistakes

• Risking too much per trade. Jumping to 5% or 10% feels great on the wins, but a normal run of five losers at 10% each leaves you down roughly 40% — and you now need a 67% gain just to break even. Keeping risk small is what lets your edge play out over hundreds of trades.
• Trading with no stop. Without a defined stop there is no per unit risk, so there is no honest way to size. A market order with no exit plan is not a position, it is a hope, and a single bad gap can erase months of work.
• Averaging down into a loser. Adding to a losing position quietly multiplies your original risk and breaks the size you carefully calculated. The trade you sized for $100 of risk can balloon to $400 of risk after two add ins, all while you tell yourself you are getting a better average price.
• Ignoring correlation. Three long positions in EUR/USD, GBP/USD and AUD/USD sized at 1% each are not 1% risk — they tend to move together, so in practice you are carrying something closer to 2.5% to 3% on a single dollar move. Treat correlated trades as one larger position when you size.
• Confusing position value with risk. A $3,000 crypto position does not mean $3,000 at risk; your risk is the distance to the stop times the size. Always size off the stop, never off how much buying power the position uses.