Calculate the exact quantity to trade based on your account size and risk tolerance. Never risk more than you should on a single trade.
Enter Your Details
Your total trading capital
Recommended: 1-2% of your account
Your Position Size
1,000
shares / units
Risk Amount₹5,000
Position Value₹1,00,000
Risk Per Share₹5.00
What is Position Sizing?
Position sizing is the process of determining how many shares or lots to buy based on your account size and risk tolerance. It's one of the most important aspects of trading that many retail traders overlook.
Without proper position sizing, even a winning strategy can blow up your account. A single bad trade with too large a position can wipe out months of profits.
The 1-2% Rule
Professional traders and fund managers follow a simple rule: never risk more than 1-2% of your account on a single trade.
This means:
With a ₹5,00,000 account and 1% risk, your maximum loss per trade is ₹5,000
Even with 10 consecutive losing trades, you'd only lose 10% of your account
This gives you enough runway to recover from losing streaks
Ignoring position sizing: Buying random quantities without calculation
Risking too much: Using 5-10% risk per trade (recipe for disaster)
Not accounting for stop loss: Position size without defined SL is meaningless
Averaging down: Adding to losing positions breaks your risk limits
Remember: Position sizing is about survival first, profits second. A smaller position with discipline will always beat a larger position driven by greed.
Frequently Asked Questions
Position sizing is calculating how many shares or lots to buy based on your account size and risk tolerance. It ensures you never risk more than a predetermined percentage of your capital on any single trade.
The 1% rule states that you should never risk more than 1% of your total trading account on a single trade. This means if you have ₹5,00,000, your maximum risk per trade should be ₹5,000.
Position Size = (Account Size × Risk %) ÷ (Entry Price - Stop Loss). For example, with ₹5,00,000 account, 1% risk, entry at ₹100 and stop loss at ₹95, position size = (5,00,000 × 0.01) ÷ 5 = 1,000 shares.
No. Position size should be calculated for each trade based on your stop loss distance. A trade with a tight stop loss will have a larger position size than one with a wide stop loss, keeping the rupee risk constant.