Calculate how many shares to buy based on your risk tolerance
Position sizing determines how many shares to buy based on your account size and risk tolerance. This is crucial for risk management.
Formula: Position Size = (Account Size × Risk %) ÷ (Entry Price - Stop Loss Price)
Example: With a $10,000 account, 1% risk ($100), entry at $50, and stop loss at $45 ($5 risk per share), you should buy 20 shares ($100 ÷ $5).
• Conservative (0.5-1%): Beginner-friendly, preserves capital, slower growth
• Moderate (1-2%): Balanced approach for most traders
• Aggressive (2-5%): Higher potential returns but more volatile
• Never exceed 5% per trade: Risking more than 5% is gambling, not investing
• Always use a stop loss: Know your exit point before entering
• Risk what you can afford to lose: Each trade should be survivable if wrong
• Diversify positions: Don't put all capital in one stock
• Adjust for volatility: More volatile stocks = smaller position sizes
• Paper trade first: Test your strategy before risking real money
• This calculator is for educational purposes only
• Not financial or investment advice
• Trading involves substantial risk of loss
• Past performance does not guarantee future results
• Always consult with a qualified financial advisor before trading