How to Calculate Trading Position Size
Risk-based position sizing with stop distance, R multiple and account exposure.
How this number is built
Calculating it yourself
Step 1
Decide the fixed percentage of the account you are willing to lose on one trade.
Step 2
Place the stop where the trade idea is actually wrong, not at a round number.
Step 3
Divide the risk amount by the stop distance to get the size.
Step 4
Check the notional exposure against your leverage limit.
Step 5
Confirm the reward-to-risk ratio justifies taking the trade at all.
What people ask next
Why size from the stop?
It keeps the dollar loss constant regardless of volatility, which is what makes a losing run survivable.
Is 1% per trade right?
It is a common starting point. What matters more is that the number is fixed in advance and applied consistently.
Searches this page answers
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