Finance Tools
What It Does
Calculates the recommended number of shares to buy (or short) on a single trade based on your account size, the percentage of your account you’re willing to risk, and the distance from your entry to your stop-loss. Implements the “1% rule” (or any other fixed-percentage risk rule) used by professional traders to size positions consistently. Optionally adds risk-reward analysis when a target price is provided, and accounts for commissions, slippage, a maximum-position cap, account leverage, and fractional shares.
How to Use It
- Enter your total trading account size.
- Set the percentage of your account you’re willing to risk on this single trade (1% is a common rule of thumb).
- Choose Long (buying) or Short (selling) for trade direction.
- Enter the planned entry price.
- Enter the stop-loss price — below entry for a long, above entry for a short.
- Optionally enter a target price to compute the risk-reward ratio and potential profit.
- Optionally enable fractional shares, set per-trade commission, slippage, a maximum-position cap (%), and account leverage.
- Click Calculate to see the recommended share quantity and full risk breakdown, or Clear to reset.
- Use Copy Results to copy the summary, or Export CSV / Export Excel to download the full analysis.
Options Explained
| Option | Description |
|---|---|
| Account size | Total capital in your trading account — the basis for risk-percentage calculations |
| Risk per trade (%) | Percentage of your account you’re willing to lose on this single trade. 1% is the classic rule; conservative traders use 0.25–0.5%, aggressive traders 2%+ |
| Trade direction | Long means buying expecting price to rise; Short means selling expecting price to fall. Affects validation of stop and target placement |
| Entry price | The price at which you plan to open the position |
| Stop-loss price | The price at which you’ll exit the trade to limit losses. Must be below entry for long, above entry for short |
| Target price (optional) | Profit-taking price — enables risk-reward ratio and potential profit calculations. Leave blank to skip |
| Allow fractional shares | Enable if your broker supports fractional shares (e.g., Robinhood, Fidelity). Disabled by default — share count is rounded down to a whole number |
| Commission per trade | Flat-fee commission per side. Round-trip cost (entry + exit) is subtracted from your risk budget |
| Slippage (%) | Estimated price movement against you between order placement and fill. 0.05–0.1% is typical for liquid stocks; up to 1% for thinly traded names |
| Max position size cap (%) | Hard cap on position size as a percentage of account value. Set to 100 to disable. Useful to enforce diversification |
| Account leverage (x) | Buying-power multiplier from margin. 1 = cash account, 2 = Reg-T equity margin, 4 = pattern day-trader margin |
| Currency | Display currency for monetary values — affects the symbol shown. Does not perform any conversion |
| Export CSV / Excel | Downloads a summary file with all inputs, sized position, and risk breakdown for record-keeping or trade journaling |
About Position Sizing
Position sizing is widely considered the single most important factor in long-term trading success — more important than entry signals, indicators, or even win rate. By sizing every trade based on a fixed percentage of account risk, you ensure that no single losing trade (or even a string of losing trades) can blow up your account.
The classic 1% rule says never risk more than 1% of your trading account on a single trade. With a $10,000 account and a 1% risk rule, your maximum loss on any trade is $100, regardless of share price or position size. The number of shares adjusts automatically based on the distance from your entry to your stop-loss.
Common Use Cases
- Sizing equity day-trades and swing-trades consistently
- Comparing position size across different stop-loss distances
- Validating risk-reward ratios before entering a trade
- Trade-journal documentation and post-trade review
- Practicing the 1% rule (or any fixed-percentage risk rule)
- Sizing trades on margin accounts with leverage caps and max-position rules
Frequently Asked Questions
What percentage should I risk per trade?
Most professional traders use 0.5–2% per trade. 1% is the classic rule and a good starting point. Conservative traders or those with smaller accounts may prefer 0.25–0.5%; aggressive short-term traders may go up to 2%, but rarely higher.
How do I choose a stop-loss?
Stop-loss should be placed at a price level where your trade thesis is invalidated — typically below a recent support level (for longs), above a resistance level (for shorts), or based on volatility (e.g., 1-2 ATRs from entry). Don’t set stops based on the dollar amount you’re willing to lose; that’s what position sizing handles for you.
What’s a good risk-reward ratio?
A 1:2 ratio (risk $1 to make $2) is widely considered the minimum acceptable for most setups. Many trend-following systems target 1:3 or higher. With a 1:2 R:R you only need to win 33%+ of trades to be profitable; with 1:3 you only need 25%+.
Should I use fractional shares?
Fractional shares help small accounts achieve precise position sizes on high-priced stocks (e.g., $1,000+ per share). Most major brokers now support them. If your broker doesn’t, leave fractional shares OFF and the calculator rounds the share count down to ensure you never exceed your risk budget.