Shares
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Calculator
Position size calculator
Enter your account size, the percent of it you accept losing on one trade, your entry price and either a stop price or an ATR multiple. The calculator returns the share count and what a gap past the stop would cost.
Position value
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Dollar risk
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The working
Start with the stop
Decide where the trade is wrong first, from the chart. The distance from entry to that stop is your risk per share. Divide the dollars you accept losing by that distance and you have the share count. A wide stop gets fewer shares; a tight one gets more. The dollar risk stays the same.
Using the average true range for the stop keeps it outside the stock's normal daily movement. The ATR page shows how the number is calculated from highs, lows and closes, and how a multiple of it turns into a stop distance.
The gap check
A stop does not guarantee its price. Scheduled events make gaps more likely, which is why the calculator prints the loss if the stock opened a set amount beyond your stop. If that figure is more than you could stand, cut the size before the event. Let the economic calendar shape your position size works through the same sum around a release date.
Position value is shown so you can see whether the share count needs more buying power than you have. Where it does, the stop distance or the risk percent has to give.
Related questions
Does a stop loss cap my loss at the amount I risk?
No. A stop becomes a market order once it triggers, and if the stock gaps past it, on news overnight for instance, the fill can be well below the stop price. The calculator sizes the position for the distance to your stop; the gap check shows what the same position would lose if price opened further away.
How do I pick the stop distance?
From the chart and the stock's normal range, never from the amount you want to risk. One common approach is a multiple of the average true range, which sets the stop outside the stock's ordinary daily noise. Then let the share count absorb the difference.