Determine your exact trade size and risk metrics instantly.
Risk management is the most critical aspect of active trading. Whether you are running an automated trading algorithm or manually executing day trades, controlling your downside is what keeps you in the market long-term.
This calculator uses the standard risk formulation. It takes your total account capital, calculates the exact dollar amount you are willing to risk (usually 1% to 2%), and divides it by the distance between your entry price and your invalidation point (stop loss).
$$Position\ Size = \frac{Account\ Balance \times (Risk\ Percentage / 100)}{|Entry\ Price - Stop\ Loss\ Price|}$$
The closer your stop loss is to your entry price, the larger the position size you can take while maintaining the exact same dollar risk. However, tighter stop losses run a higher risk of being triggered by normal market volatility. Always set your stop loss based on technical invalidation, not just arbitrary numbers.