Position sizing decides how many shares to buy so that a stop loss hit costs you only a fixed, small part of your capital. It is the part of a trading plan that controls the size of a loss before the trade is placed.
How the position size calculator works
The calculation has two steps:
Amount at risk = Capital × Risk %
Quantity = Amount at risk ÷ (Entry − Stop loss)
With ₹5,00,000 capital and 1% risk, you can lose ₹5,000 on the trade. If entry is ₹250 and the stop is ₹240, the risk is ₹10 a share, so the quantity is 500 shares.
Frequently asked questions
How much should I risk per trade?
Many rule-based traders keep it between 0.5% and 2% of capital so that a run of losing trades does not do serious damage. The right number depends on your own plan.
What if the position value is more than my capital?
A very tight stop can give a quantity you cannot afford. Check the “Capital used” line and reduce the quantity if it is too high.
Does this cover gaps and slippage?
No. A stock can open below your stop, and the actual loss can then be larger than planned.
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This calculator is for education and illustration. Results are estimates based on the numbers you enter and are not a prediction, guarantee or investment advice.