Position Sizing Calculator
Position size reduces to one number — the percentage of an account risked per trade — and that same number is the single lever the simulator below re-runs live: set it, and both the dollar size of a trade and the simulated share of paths that survive move together.
Risk per trade (%) is the position-sizing lever — the field below converts directly into a dollar risk and, via the simulation, into a survival share.
The mechanism
Position sizing has one piece of arithmetic underneath it: a stated risk percentage sets a dollar amount, and the distance to a stop converts that dollar amount into a whole number of contracts or shares.
| Step | Formula | Worked ($50,000 account, 1% risk, $250 stop distance) |
|---|---|---|
| Dollar risk | balance × risk% | $50,000 × 1% = $500 |
| Position size | dollar risk ÷ stop distance | $500 ÷ $250 = 2 contracts |
The stop distance in that second row is itself a choice (a $250 stop is a 5-point stop on a $50-per-point instrument, stated here only as one example) — a wider stop buys more room per trade at the cost of fewer contracts for the same dollar risk, and a narrower one does the reverse. Reading a dollar-risk number off a risk percentage is exact arithmetic; converting that dollar risk into a whole number of contracts is not, because contracts don't fracture — the rounding that step forces is its own subject, covered in full in Position sizing: four methods, four assumptions, and the rounding problem.
Holding the stop distance fixed and only moving the risk percentage:
| Risk per trade | Dollar risk | Contracts | Lives (10% drawdown) |
|---|---|---|---|
| 0.25% | $125 | 0 | 40 |
| 0.5% | $250 | 1 | 20 |
| 1% | $500 | 2 | 10 |
| 1.5% | $750 | 3 | 6.7 |
| 2% | $1,000 | 4 | 5 |
The 0.25% row above rounds to 0 contracts on this stop distance — not takeable at all without either a tighter stop or a larger account, which is exactly the rounding problem the previous paragraph names, made concrete.
Why this is the lever, not the edge
Win rate and average win/loss (in R) describe a strategy's edge — they come from a trader's own trade history and don't move because a calculator is opened. Risk per trade is different: it is set before a trade is placed, and it is the only one of the three numbers behind risk of ruin that is entirely the trader's own choice. That is why the field labelled "Risk per trade (%)" in the calculator above is the one this page's whole subject sits on — change it and watch both the dollar-risk arithmetic above and the simulated survival share respond to the same input.
The free personal-rule engine currently models a stated Max Drawdown allowance as a fixed floor measured from your starting balance, not a floor that ratchets upward with a new equity peak — see the trailing drawdown calculator for what that changes and does not change about a position-sizing decision.
FAQ
- What is position sizing?
- The decision that converts a stated risk percentage of an account into an actual number of contracts or shares for one trade, given the distance from entry to a stop.
- How do I calculate position size from a risk percentage?
- Multiply account balance by the risk percentage to get a dollar risk, then divide that dollar risk by the distance from entry to stop (in the same dollar terms) to get a position size — rounded down to a whole number of contracts or shares, since fractional contracts do not trade.
- Does position size change risk of ruin?
- Yes — of the three inputs behind a risk-of-ruin simulation (win rate, average win/loss, and risk per trade), risk per trade is the only one set directly by the trader rather than measured from trading history, which is what the risk of ruin calculator holds constant while risk per trade varies.
Run it against your own numbers
The same engine, unlimited runs, at the same free accuracy as this page's calculator — open the full personal rule editor to save a rule set, add a profit goal or daily loss stop, or import a trade history.
Open the personal rule editor — free, full accuracy →Rules and outcomes vary by firm and by trader; nothing on this page is investment or trading advice, and PropSurvival is not affiliated with, endorsed by, or sponsored by any prop trading firm. This calculator models a stated rule set — it does not predict market outcomes.