Reasoned Markets

Decision tool

Position-size calculator

Estimate the largest tradable quantity whose planned stop loss stays within a chosen account-risk budget before trading costs.

Calculator

Size by planned account risk

Enter prices in one currency. Risk percentage uses percentage points: enter 1 for 1%.

Trade direction

Long stops sit below entry; short stops sit above entry.

Must be greater than zero.

Greater than 0% and no more than 100%.

Price per tradable unit.

Below entry for long; above entry for short.

Use 1 for whole shares or the allowed fractional increment.

Method

Formula and logic

Planned risk budget = account balance × risk percentage ÷ 100. Risk per unit is the distance between entry and stop. The raw quantity is the budget divided by that distance.

The calculator rounds down to the selected tradable increment so the modeled loss at the entered stop does not exceed the budget.

Verification

Worked example

For an account balance of 100,000, planned risk of 2%, entry at 50, and a long stop at 45: the budget is 2,000, risk per unit is 5, and the whole-unit position is 400 units. Modeled stop loss before costs is 2,000.

Boundaries

Limitations

  • The output is a planning aid, not a recommendation to enter a trade.
  • Stops are execution instructions, not guaranteed loss ceilings.
  • Trading costs, gaps, liquidity, margin rules, and portfolio-level concentration are excluded.

Questions

Frequently asked questions

Why can position notional exceed the account balance?
The calculation sizes only against planned stop risk. It reports notional separately and does not assume whether cash, margin, leverage, or broker buying power is available.
Does the stop price cap the loss?
No. A gap, slippage, unavailable liquidity, or failed execution can cause a fill beyond the stop and a larger realized loss.