Position Sizing Calculator
- Adam Ampersand
- Sep 9
- 3 min read
Your path to consistent, low-stress gains
By the end, you’ll consistently size trades to risk only 1 % of your equity, protecting your account from large drawdowns and building confidence for bigger setups.
In this section, you’ll discover why position sizing sits at the heart of robust risk management, learn three proven sizing methodologies, and master an automated calculator that translates your inputs into precise lot or share quantities in seconds. You’ll also work through real-world scenarios, bite-sized quizzes and templates, and a signature Ampersand anecdote to lock in disciplined sizing habits that cap losses at 1–2 % of your equity.
Proper position sizing is the foundation of professional risk management, ensuring you never risk more than you can afford to lose on a single trade. By defining a fixed percentage of your account to risk (typically 1–2 %) you cap losses and stabilise your emotional state during market swings.
The Position Sizing Calculator automates these calculations, taking your account size, chosen risk percentage, and stop-loss distance to deliver an exact lot or share size in seconds.
In this bonus article, you’ll get a sneak peak into some of the "Trading For A Living" strategies and insights.:
A Quick Start Guide & Cheat Sheet for on-the-fly calculations
Scenario Walkthroughs & Case Studies showing real-world sizing decisions
Insider Templates like risk-management checklists
Micro Learning Quizzes to cement your understanding
Additional Learning Tools such as Flash Card & Word-Match Templates for long-term retention
Juggling 9–5 responsibilities?
You need fast, reliable tools that minimise time spent on calculations while protecting capital.
In this module, you’ll learn to:
Define your Risk Percentage based on your comfort level and available capital .
Calculate your Position Size in seconds using our calculator or a simple formula .
Implement Stop-Loss Discipline to limit downside risk and free your mind to focus on entries.
Quick Start Guide & Cheat Sheet
Why Position Sizing Matters
Position sizing determines how much capital to allocate per trade so no single loss can jeopardise your account. Defining a fixed percentage of your equity (eg. 1–2%) can bring consistency across market conditions and stabilises emotional swings during volatility . Automated calculators remove manual errors and speed up execution, letting you stay focused on strategy rather than maths.
“Calculate your position size now, and lock in disciplined risk control.”
Formula: Position Size = (Account Size × Risk %) ÷ (Entry Price – Stop-Loss Price)
Example:
Scenario 1: Equities (Fixed-Fractional)
Inputs: $20 000 account, 1 % risk, entry $100, stop-loss $98 (spread $2)
Calculation: $200 ÷ $2 = 100 shares
Result: Caps loss at $200 even if price gaps against you
Scenario 2: Forex (Volatility-Adjusted)
Inputs: $5 000 account, 0.5 % risk, EUR/USD entry 1.1200, ATR = 40 pips
Calculation: $25 ÷ 0.0040 = 6 250 units
Result: Automatically reduces size in high-volatility sessions
This disciplined approach prevented a market drop from wiping out your account, preserving your ability to trade again. Always take caution and take profit when you can, so you can trade another day.
Quiz
Q: If you have $5,000 and risk 2 %, with an entry at $20 and stop at $19, how many shares?
A) 50 shares
B) 100 shares
C) 200 shares
A: B) 100 shares (Risk $100 ÷ $1 spread)
Flash Card / Word Match Template
Card 1: Front: “Position Size Formula?”
Back: “(Acct × Risk %) ÷ (Entry – SL)”
Word/Match Example: “Risk % → Capital exposure; Spread → Price difference”
In my early days, I thought bigger positions meant bigger profits, until a single 3% move wiped out 65 % of my account. That blow up taught me the hard way: growth isn’t about greed, it’s about survival. When I switched to risking just 1 %, I turned crushing losses into steady compounding profits. Now, every trade is an opportunity, not a threat.
