TL;DR

Position sizing decides how much of your capital goes into a single trade. The core rule: never risk more than 1-2% of your account on one position. This calculator works backward from your risk tolerance and stop-loss distance to tell you the exact position size — so a losing trade costs a known, survivable amount instead of a guess. Get this right and you can be wrong 60% of the time and still grow your account.

Why Position Sizing Matters More Than Your Entries

Most new traders obsess over entry signals — the perfect indicator, the ideal candlestick pattern, the exact moment to buy. But ask any trader who has survived more than a few years and they'll tell you the same thing: position sizing is what keeps you in the game. You can have a mediocre entry strategy and still be profitable if your sizing is disciplined. You can have a brilliant entry strategy and still blow up your account if it isn't.

The reason is simple math. If you risk 2% per trade, a string of ten consecutive losses — which happens to everyone eventually — leaves you down about 18% and fully able to recover. If you risk 20% per trade, that same losing streak wipes out almost your entire account. Same strategy, same market, completely different outcome. The difference is sizing.

The Position Size Formula

The calculation this tool performs is straightforward once you see it:

Position Size = (Account × Risk %) ÷ (Entry − Stop Loss) × Entry

Breaking it down: Account × Risk % is the maximum dollars you're willing to lose on this trade (your "risk amount"). The distance between your entry and your stop-loss, expressed as a percentage, tells you how big the position can be before that risk amount is hit. The calculator combines these to output the position size in both your quote currency and units of the asset.

For example: a $5,000 account, risking 1% ($50), entering BTC at $60,000 with a stop at $58,800 (a 2% stop distance). The math gives a position of $2,500 — meaning if the stop is hit, you lose exactly $50, no more. Tighten the stop to 1% distance and you can size up to $5,000 for the same $50 risk. The tighter your stop, the larger the position you can hold at the same risk.

The 1-2% Risk Rule Explained

The single most repeated piece of advice in trading is to risk no more than 1-2% of your account per trade. This isn't arbitrary — it's drawn from the mathematics of drawdown and recovery. Here's why the number matters:

Risk 1%: You'd need 20 losses in a row to lose ~18% of your account. Recoverable without drama. This is where most professionals operate.
Risk 2%: Still safe for experienced traders. Ten consecutive losses costs ~18%. Reasonable for higher-conviction setups.
Risk 5%+: Now you're in dangerous territory. A normal losing streak can cut your account in half, and the deeper a drawdown gets, the harder it is to recover — a 50% loss requires a 100% gain just to break even.

The asymmetry of losses is the key insight. Lose 10% and you need 11% to recover. Lose 50% and you need 100%. Lose 90% and you need 900%. Small, controlled risk keeps you on the survivable side of that curve.

How to Use This Calculator

Account balance — your total trading capital, not just what you plan to deploy.
Risk per trade — start at 1% if you're learning. This is the maximum you'll lose if the stop triggers.
Entry price — where you plan to open the position.
Stop-loss price — where your thesis is invalidated and you exit. This should be set at a technical level, not an arbitrary distance.
Leverage — for spot, leave at 1×. For futures, your sizing doesn't change but your margin requirement does. The position size stays the same; leverage only determines how much margin is locked.

A common misconception is that leverage changes how much you should risk. It doesn't. Your risk is defined by your stop-loss distance and position size — leverage just changes how much collateral the exchange holds. Risking 1% on a 10× position is identical to risking 1% on a 1× position if the stop distance is the same.

Position Sizing for Leveraged Futures

On perpetual futures, position sizing has one extra layer to watch: the relationship between your stop-loss and your liquidation price. With high leverage, your liquidation price can sit closer to entry than your intended stop-loss — which means the exchange could force-close you before your stop ever triggers.

The rule: your stop-loss must always be reached before your liquidation price. If you're using 20× leverage, your liquidation is roughly 5% away, so a stop placed 6% from entry is useless — you'll be liquidated first, paying extra liquidation fees on top. Either widen your leverage buffer or tighten your stop. The liquidation calculator shows exactly where that line sits for any leverage setting.

5 Position Sizing Mistakes That Blow Up Accounts

Sizing by gut feeling. "This one looks good, I'll go bigger" is how accounts die. Conviction has no place in sizing — the math is the math regardless of how confident you feel.
Moving the stop instead of the size. When a position is too big, the temptation is to set a tighter stop to limit risk. This just gets you stopped out by noise. Size down instead and give the trade room to breathe.
Ignoring correlation. Three separate 1% positions in BTC, ETH, and SOL is not 3% risk — it's closer to one concentrated 3% bet, because they move together. Treat correlated positions as a single risk unit.
Risking a percentage of margin, not equity. Your risk should be a percentage of your total account, not of the margin you posted. Confusing the two leads to massively oversized positions on leveraged trades.
Forgetting fees and funding in the risk. Your real loss on a stopped-out trade includes round-trip fees and any funding paid while holding. On tight stops, fees can be a meaningful chunk of the "1%" you thought you were risking. The fee calculator quantifies this.

Frequently Asked Questions

What is the ideal position size for a beginner?

Risk 1% of your account per trade while you're learning. On a $1,000 account that's $10 of risk per trade. It feels small, and that's the point — it lets you make the inevitable beginner mistakes without destroying your capital, while you learn how positions actually behave. You can scale risk up to 2% once you have a consistent, tested approach.

Does position size change with leverage?

No. Position size is determined by your account, your risk percentage, and your stop-loss distance — none of which involve leverage. Leverage only affects how much margin the exchange locks to hold the position. A correctly sized position risks the same dollar amount whether you use 1× or 20×; higher leverage just frees up more of your balance (and moves your liquidation price closer, which is the real risk).

Should I use a fixed dollar amount or a percentage of my account?

Percentage-based sizing is better because it compounds and self-corrects. When your account grows, your position sizes grow proportionally; when you hit a drawdown, they shrink automatically, protecting your remaining capital. Fixed-dollar sizing keeps risking the same amount even as your account shrinks, which accelerates losses during bad stretches.

How does my stop-loss distance affect position size?

Inversely. The tighter your stop, the larger the position you can hold at the same risk — because the price has less room to move before hitting your maximum loss. A 1% stop allows roughly double the position size of a 2% stop for the same risk amount. This is why stop placement and position sizing must be decided together, never separately.

What if I don't use a stop-loss?

Then you can't size properly, and you're gambling rather than trading. A position without a defined exit has undefined risk — you literally cannot calculate how much you stand to lose. Every position should have a stop-loss set at the level where your trade idea is proven wrong. If you can't identify that level, you don't have a trade, you have a hope.

Position SizeCalculator