What percentage of the account should a single trade risk?

Common practice is 0.5 % to 2 % of equity per trade. The number is not a constant of nature; it follows from your win rate and the losing streak you should expect. At a 40 % hit rate, eight losses in a row is statistically ordinary. At 2 % risk that streak costs about 15 % of the account; at 5 % risk it costs a third — and a third lost needs a 50 % gain to recover.

R is the amount a trade loses at its stop — your defined risk. Every outcome can be expressed as a multiple of it: a trade that makes twice the risk is +2R. The point of the unit is comparability: trades of different sizes and instruments become measurable on one scale, independent of account currency and price level.

The calculated position is bigger than my account — is that an error?

No, that is the expected result with a tight stop. A stop one percent below entry, at one percent account risk, arithmetically produces a position the size of the whole account. It is only tradable with borrowed money or as a derivative. Both change the risk profile: financing accrues daily, and a price gap can push the loss past the planned amount. The margin calculator shows how close such a position sits to a margin call.

Should the stop be set by percentage or by volatility?

A fixed percentage ignores how much an instrument normally moves and gets triggered by ordinary noise in volatile names. A volatility-based stop — say a multiple of the average daily range — adapts to the instrument. For this calculator the method is irrelevant: only the price distance you enter matters.

Calculators

Position size calculator

How large can a position be at your risk level?

Position size decides what a single failed idea costs. Enter account size, the risk you accept, your entry and your stop — the calculator derives how many shares, lots or contracts that allows and how much capital the position ties up.

Inputs

Account balance

All capital available for trading, not just the free margin.

Account currency

Risk as a percentage of the account

Risk per trade (%)1.0 %

What this one trade is allowed to cost if the stop is hit. €250

Instrument

Entry price

Stop-loss price

The price at which the idea is wrong — not the price you can afford.

Position size

63 shares

Tradable size: 62 shares

Capital committed

€6,200

Leverage required: 0.25:1

Risk in money

€250.00

1.00 % of the account

Stop distance

4.00 (4.00 %)

Actual risk at that size: €248.00

The tradable size is rounded down (shares and futures to whole units, forex to 0.01 lots, crypto to six decimals), so actual risk lands slightly below the target.

Position size by risk step

Risk	Risk in money	Position size	Capital committed
0.25 %	€63	15 shares	€1,500
0.50 %	€125	31 shares	€3,100
1.00 %	€250	62 shares	€6,200
2.00 %	€500	125 shares	€12,500
3.00 %	€750	187 shares	€18,700

Assumptions behind this calculation

The calculation assumes a long position; for shorts the stop sits above the entry and the result is symmetrical.
The stop is assumed to fill at the price entered. Slippage, gaps and weekend moves can make the real loss larger — for shares especially overnight.
Commissions, spread and tax are excluded. Use the break-even calculator to see which move covers those costs.
Forex: one standard lot is 100,000 units of the base currency; pip value is an input because it depends on the quote and account currency.
Futures: point value is contract-specific and must be taken from the venue's contract specification.

Note: These calculators are for information only and are not investment advice. Content on Brokaro is for information purposes only and is not investment, legal or tax advice.

How this is calculated

The stop sets the size, not the other way round

The order of operations is always the same: decide what a trade may cost, put the stop where the idea is proven wrong, then compute the size. Doing it backwards — picking a quantity first and then placing the stop — ends with the stop being moved to fit the position. That is the most common route from a small loss to a large one.

Percentage or fixed amount

A percentage of equity shrinks position size automatically as the account shrinks, which damps losing streaks but also slows the recovery. A fixed cash amount keeps risk constant and is often more workable on small accounts, where commissions otherwise stop being proportionate. Either is defensible; what matters is that the rule exists before the trade does.

Units differ by instrument

For shares the unit is one share; for forex a lot of 100,000 units of the base currency; for futures a contract with a fixed point value from the contract specification; for crypto any fraction. That is why the forex mode asks for pip value and the futures mode for point value: both depend on the quote and account currency and cannot be assumed in general.

What the calculation does not cover

A stop is an intention, not a guarantee. Overnight gaps, news outside trading hours and thin order books can fill far worse than planned — on a leveraged position the real loss is then larger than the figure shown here. Add trading costs on top: the break-even calculator shows what move the fees alone require.