Position Size & Risk Calculator
Determine the exact number of shares or lots to buy so you never lose more than your designated risk tolerance (1%–2% rule).
Trade Parameters
Risking exactly ₹1,000 on this trade setup.
Even with 5 consecutive losses at 1% risk per trade, you will retain 95.1% of your total capital, leaving your psychological discipline and account fully intact.
The Mathematics of Position Sizing
Position sizing is the single most critical risk management skill in financial trading. Amateurs focus exclusively on where to enter and exit, while professional hedge funds and prop traders focus on how much capital to commit to each trade.
Where (Entry Price - Stop Loss Price) represents your per-share dollar risk, and (Account Capital × Risk %) represents your absolute maximum risk allowance in cash.
Position Sizing in Action (1% Risk on ₹10 Stop Loss)
| Account Capital | Max Risk (1%) | Risk/Share | Allowed Quantity | Total Position Value (at ₹500) |
|---|---|---|---|---|
| ₹50,000 | ₹500 | ₹10 | 50 shares | ₹25,000 |
| ₹1,00,000 | ₹1,000 | ₹10 | 100 shares | ₹50,000 |
| ₹5,00,000 | ₹5,000 | ₹10 | 500 shares | ₹2,50,000 |
| ₹10,00,000 | ₹10,000 | ₹10 | 1,000 shares | ₹5,00,000 |
Frequently Asked Questions
What is the 1% risk rule in trading?
The 1% rule states that a trader should never risk more than 1% of their total account equity on any individual trade. If you have a ₹1,00,000 account, your maximum loss on a trade if your stop-loss is triggered must not exceed ₹1,000. This ensures longevity and protects against inevitable losing streaks.
Does position sizing change if I use intraday leverage (margin)?
No! Your risk limit in rupees/dollars should NEVER increase because of margin. Margin merely reduces the upfront cash required to buy the recommended quantity. If your risk is ₹1,000, your stop-loss must still cut the trade at ₹1,000 loss regardless of whether you used 1x or 5x broker margin.
What is an acceptable Risk-to-Reward (R:R) ratio?
Most professional traders require at least a 1:1.5 or 1:2 Risk-to-Reward ratio before taking a setup. With a 1:2 R:R, you only need to win 34% of your trades to be profitable over time.
Learn More: Risk Management Guide
Read our complete tutorial on stop-loss placement, position sizing, and drawdown psychology.