TradesMatrix Guide
How to Calculate Position Size
Position sizing translates a chosen risk amount and stop distance into a quantity. It is a planning calculation, not a guarantee that realized losses will stay within the estimate.
Basic formula
Risk Amount = Account Value × Risk Percentage
For a simple share or unit calculation: Position Size = Risk Amount ÷ |Entry Price − Stop Price|.
Example
With an account value of ₹100,000 and a planned 1% risk, the risk amount is ₹1,000. If entry is ₹150 and the stop is ₹145, the per-unit price risk is ₹5, giving 200 units before fees, slippage, and contract-specific adjustments.
Check assumptions
- Use a stop level that reflects your actual trade plan.
- Account for fees, slippage, lot sizes, leverage, and product specifications.
- A stop may execute at a different price during gaps or fast markets.
- Choose risk limits appropriate to your circumstances; this example is not a recommendation.
Educational information only, not investment or financial advice. Calculator outputs depend on the inputs and assumptions used; they do not predict results or remove trading risk.