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Risk management

Position size calculator

Enter your account size, risk tolerance, and stop loss. Get the exact number of coins or contracts to trade while keeping your risk controlled.

$

Total trading capital available

%

Most professionals risk 1–2% per trade

$
$

Below entry price

Position size

0.0500

$3,000.00 notional value

Capital at risk

$100.00

Stop distance

$2,000.00

How position sizing works

Position sizing is how professional traders convert a risk budget into actual trade quantities. The math is straightforward: decide what percentage of your account you are willing to lose on this trade, convert that to a dollar amount, then divide by the distance to your stop loss.

If you have a $10,000 account, risk 1% per trade ($100), and your stop loss is $2,000 below your entry, you buy $100 / $2,000 = 0.05 BTC. Your position is worth $3,000, but your actual risk is controlled at $100. This is the foundation of professional risk management.

The 1–2% rule

Most experienced traders risk no more than 1–2% of their account on any single trade. This is not arbitrary — it is derived from the mathematics of drawdown survival. At 2% risk per trade, a 20-trade losing streak (which happens in most strategies over a multi-year period) reduces your account to 67% of its original size. Painful, but survivable. At 10% risk, a 10-trade losing streak — which is statistically common — leaves you with 35% of your starting capital. Few traders recover psychologically or practically from that kind of damage.

The goal of position sizing is not to maximize any single trade's profit. It is to ensure you survive the inevitable losing streaks long enough for your edge to express itself over hundreds of trades.

Stop loss placement drives everything

Your stop loss should be placed at a level where, if reached, your original trade thesis is definitively wrong — not wherever produces a "comfortable" loss size. A stop placed at a key support level 8% below entry on a volatile altcoin is a legitimate stop. Moving it to 2% below entry because you want a larger position is not risk management — it is wishful thinking that will result in being stopped out before the trade has time to work.

When your technically correct stop produces a very small position size, that is the market telling you the setup has poor risk characteristics. The correct response is to take the smaller position or pass on the trade — not to move your stop closer and pretend the risk is acceptable.

Testing position sizing on historical data

Theoretical position sizing math is only the starting point. What actually matters is how a given risk percentage performs across a strategy's full trade history — including the worst drawdown periods, the winning streaks, and the transition between regimes. Backtesting with realistic position sizing is the only way to know if a strategy is truly survivable at a given risk level.

Test your strategy with realistic position sizing →

Frequently asked questions

What is position sizing in trading?
Position sizing determines how many units of an asset you buy or sell on a given trade. It is calculated from three inputs: your account size, the percentage of your account you are willing to risk on that trade, and the distance between your entry and stop loss. Getting this right is what separates traders who survive drawdowns from those who blow up.
What percentage of my account should I risk per trade?
Most professional discretionary traders risk 1–2% per trade. Algorithmic traders often use 0.5–1%. At 2% risk, you can lose 50 trades in a row before losing your account — psychologically and mathematically survivable. At 10% risk, 10 consecutive losses wipe you out, and losing streaks of 10+ happen regularly in most strategies.
How does stop distance affect position size?
Stop distance and position size move inversely. If your stop is very close to your entry (tight stop), you can take a larger position while keeping the same dollar risk. If your stop is far away (wide stop), you must take a smaller position. This is why volatile assets force smaller positions — their wider stops require proportionally less size.
Does position size change with leverage?
This calculator gives you the position size in asset units, which is the same whether you trade spot or futures. With futures, your required margin changes with leverage, but the position size (and therefore the risk) remains the same. Increasing leverage does not let you take more risk — it means you need less margin to hold the same position.
How does crypto volatility affect position sizing?
Crypto assets have much higher volatility than equities or forex. Bitcoin regularly moves 3–5% in a day; altcoins can move 10–20%. This forces wider stops for any technically sound level, which automatically reduces your position size versus a lower-volatility asset. This is the market enforcing caution on you through the math.
What is the Kelly criterion and should I use it?
Kelly criterion is a formula that tells you the optimal fraction of your capital to bet given your edge (win rate and payoff ratio). Full Kelly is mathematically optimal in the long run but produces extreme drawdowns that most traders cannot tolerate. Half-Kelly (0.5 × Kelly) is more practical. Fixed fractional position sizing (this calculator) is simpler and gives very similar long-run results for most strategies.
Should I use the same position size for every trade?
Fixed fractional sizing (same risk % per trade) is the most common approach and what this calculator implements. Some traders vary size based on signal strength or conviction, but this introduces judgment risk. Systematic traders generally prefer consistent sizing because it removes emotion from the decision and allows clean performance measurement.