Position Size Calculator
Work out how many shares to buy (or sell short) so that a stop-loss hit costs you only the slice of capital you decided to risk. Add a target to see the risk-reward ratio.
Many traders keep this at 1–2%.
Below entry for a long trade, above it for a short.
Long trade · risk budget ₹5,000 · risk per share ₹30.00
Quantity (shares)
166
Position value
₹2,07,500
Loss if stop hit
₹4,980
Reward : risk
3.00 : 1
Reward per share
₹90.00
Profit at target
₹14,940
Frequently asked questions
What is position sizing?+
Position sizing decides how many shares to buy so that, if your stop-loss is hit, you lose only a fixed slice of your capital. The quantity comes from your risk budget divided by the risk on each share — not from how confident you feel about the trade.
How is the quantity calculated?+
Risk budget = capital × risk %. Risk per share = the gap between entry price and stop-loss. Quantity = risk budget ÷ risk per share, rounded down to whole shares. A wider stop-loss therefore means a smaller position, and a tighter one a larger position.
What is the 1% or 2% rule?+
Many traders cap the loss on any single trade at 1–2% of their capital, so a run of losing trades cannot wipe out the account. With ₹5 lakh and 1% risk, the most you would lose on one trade is ₹5,000. It is a guideline, not a rule of law — pick a level you can stick to.
What is the risk-reward ratio?+
It compares the profit per share if your target is reached with the loss per share if your stop-loss is hit. A 2 : 1 ratio means you stand to make twice what you risk. Higher ratios let a strategy stay profitable even when fewer than half the trades work.
Does this include brokerage, taxes or slippage?+
No. STT, brokerage, exchange charges, GST and stamp duty, plus slippage when the stop-loss order fills at a worse price, all add to the real loss. Keep some margin below your risk budget to absorb them.
For education only — not investment advice. Trading in securities involves risk of loss; see our disclaimer.