Formula
Quantity = max risk amount / risk per share
RiskR
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Position Sizing
Position sizing converts your risk budget and stop distance into a share quantity.
Worked example
Risk budget: 500 USD. Entry: 50. Stop: 48.
Risk per share is 2 USD.
Position size is 500 / 2 = 250 shares, then capped by available capital if needed.
FAQ
What if capital cap is lower than risk-based size?
Use the lower quantity so position value stays inside planned capital usage.
Can I still use manual share sizing?
Yes. Manual sizing is useful when your broker constraints or lot sizes are already decided.
Apply this in the calculator
Use this concept in a synthetic setup, then validate risk, reward, and R-multiple before placing a trade.
Open calculatorEducational content only. Not financial advice.