Risk-based position sizing answers one question: how big can this trade be so that hitting my stop loses exactly the amount I chose? The inputs are your account, your risk percentage, and the distance to your stop — the size falls out of the math, never out of conviction.
The calculator below also reports the notional value and the implied leverage, because that is where sizing quietly goes wrong: a stop sitting very close to entry produces an enormous position whose fees and slippage rival the planned risk.
The formula
Position size = (account × risk%) ÷ (entry-to-stop distance × point value). On a $10,000 account risking 1% with entry $62,500 and stop $62,100: risk cash is $100, stop distance is $400, so the size is 0.25 units — notional $15,625, about 1.6× leverage.
For futures, multiply the stop distance by the contract’s point value (NQ is $20 per point, ES is $50) — the “point value” field handles this.
The leverage trap our backtest engine guards against
Risk-based sizing explodes when the stop is a hair from entry: halve the stop distance and the size doubles, but fees are charged on the notional — so a tight-stop trade can pay more in commission than its entire planned risk. We hit this exact failure running our published strategy research: ICT-style structure stops occasionally sat 0.05% from entry, implying 20× leverage, and round-trip fees nuked the account. The engine now caps positions at 10× notional, and this calculator flags any size that crosses the same line.
Frequently asked questions
How much should I risk per trade?
1% of equity per trade is the most common professional default, and it is what all of our published backtest research uses. Above 2–3%, ordinary losing streaks produce account-threatening drawdowns: at 2% risk, a 10-loss streak — routine for a 40%-win-rate system — costs about 18% of the account.
Does this work for forex lots?
Yes — compute size in base units, then convert: a standard lot is 100,000 units, a mini 10,000, a micro 1,000. Set point value to your pip value per unit if you prefer working in pips.
Why does the calculator warn me about leverage?
Because fees and slippage are charged on the notional position, not on your planned risk. Past roughly 10× leverage the round-trip costs of a tight-stop trade start rivalling the 1R risk itself — a failure mode we measured directly in our 1-minute scalping research, where commissions exceeded the entire starting account.