Decide how much you are willing to lose before you decide how much to buy. Enter your account size, the share of it you will risk on this trade, and your entry and stop. The calculator returns the number of shares that keeps a stopped-out loss at exactly that amount.
How position sizing works
Position size comes from three numbers: how much of your account you are prepared to lose on one trade, where you enter, and where you will be proven wrong.
- Dollar risk = account size × risk per trade. On a $50,000 account risking 0.5%, that is $250.
- Risk per share = entry − stop. Buying at $42.50 with a stop at $40.10 risks $2.40 a share.
- Shares = dollar risk ÷ risk per share. $250 ÷ $2.40 = 104 shares, rounded down.
The stop sets the size, not the other way round. A tight stop allows a larger position for the same dollar risk; a wide stop forces a smaller one. That is why tight setups — a volatility contraction or the low of an opening range — let you size up without taking more risk.
How much to risk per trade
Most experienced swing traders risk between 0.25% and 1% of their account per trade. At 0.5%, ten losses in a row costs about 5% of the account — a drawdown you can recover from. At 5% per trade, the same losing streak removes more than 40%.
Many traders also scale risk to the market: fuller size when breadth is strong, smaller size when it is not. See how to read market breadth.
Why cap the position size
A very tight stop can produce a position that is a large share of the account. The loss at the stop is still controlled, but a gap through the stop overnight is not. The max position field caps the position at a share of your account so one stock cannot dominate it; when the cap binds, the calculator shows the reduced share count and the risk that goes with it.
R-multiple targets
R is your risk per share. A 2R target is twice that distance above the entry for a long. Thinking in R keeps winners and losers on the same scale: a strategy that wins 40% of the time is profitable if the average winner is well above 1.5R.
Find the setup, then size it
Nightly scans for breakouts, episodic pivots and VCPs across roughly 1,900 US stocks, with the stock’s average daily range shown for every match.
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