Position sizing is arguably the most important aspect of risk management. This calculator helps you determine exactly how many shares to buy based on your risk parameters.
How Position Sizing Works
The core principle is simple: never risk more than a fixed percentage of your account on any single trade.
Most professional traders risk 1-2% per trade. This means:
- If you have ₹5,00,000 and risk 1%, you risk ₹5,000 per trade
- If you have ₹10,00,000 and risk 2%, you risk ₹20,000 per trade
The Position Size Formula
Position Size = (Account Size × Risk %) / Risk Per Share
Where:
Risk Per Share = Entry Price - Stop Loss
Example Calculation
Given:
- Account Size: ₹5,00,000
- Risk Per Trade: 1%
- Entry Price: ₹500
- Stop Loss: ₹480
Calculation:
- Risk Amount = ₹5,00,000 × 0.01 = ₹5,000
- Risk Per Share = ₹500 - ₹480 = ₹20
- Position Size = ₹5,000 / ₹20 = 250 shares
Result: Buy 250 shares. If stopped out, you lose exactly ₹5,000 (1% of account).
Why Position Sizing Matters
Consider two traders, both starting with ₹5,00,000:
Trader A (No Position Sizing):
- Buys random quantities based on “feeling”
- One bad trade loses ₹50,000 (10% of account)
- Needs 11% gain just to recover
- Emotionally devastated, makes revenge trades
Trader B (Proper Position Sizing):
- Risks 1% per trade consistently
- Worst loss is ₹5,000
- Can survive 20+ losing trades in a row
- Emotionally stable, follows system
Position Sizing for Different Markets
Stocks (NSE/BSE)
Use the basic formula above. Account for lot sizes and minimum quantities.
Futures (NIFTY, BANKNIFTY)
Calculate based on points and lot size:
Lots = Risk Amount / (Stop Loss Points × Lot Size × Point Value)
Options
More complex due to premium decay. Generally, limit premium spent to your risk amount.
Common Position Sizing Mistakes
- Risking too much - Even “sure things” can fail
- Variable risk % - Stick to your rule, always
- Ignoring slippage - Gap openings can exceed your stop
- Adding to losers - This increases position size in a losing trade
How JournalPlus Helps
You just calculated your position size for one trade. Now imagine doing that for every trade, every day — and then checking whether you actually followed your own rules.
That’s what JournalPlus does automatically. It calculates the correct position size for every trade based on your account balance and risk rules, then tracks whether you stuck to the plan. You’ll see exactly where you over-sized, under-sized, or nailed it — and how that affected your returns.
Stop calculating manually. Start trading with discipline built in.
