Trade Risk Calculator
Calculate the ideal position size and risk/reward ratio for your trades — manage capital effectively by defining exact risk per trade and stop-loss levels.
Trade Risk Calculator
Account & Risk Settings
Trade Parameters
Calculation Results
Recommended Position Size
Total Position Value: $3,000
Risk Amount
$100
Risk/Reward
1 : 3.00
Reward Potential
Risk Management Note
Always stick to your stop loss. This calculator assumes zero slippage and ignores commissions or spreads. Ensure your leverage (if applicable) supports this position size.
The Golden Rule: Never Over-leverage
How It Works
Risk management is the process of identifying, analyzing and either accepting or mitigating uncertainty in investment decisions. In trading, the most important part of risk management is **Position Sizing**.
Instead of guessing how many shares to buy, professional traders calculate their size so that if their stop loss is hit, they only lose a specific percentage of their account (usually 1% or 2%).
Formula Used
Position Size Calculation:
1. Risk Amount = Account Balance × Risk Percentage
2. Risk per Share = Entry Price - Stop Loss Price
3. Position Size = Risk Amount / Risk per Share
4. Risk/Reward Ratio = (Target Price - Entry Price) / (Entry Price - Stop Loss Price)
Risk Management Tips
The 2% Rule: Never risk more than 2% of your total account equity on any single trade setup.
Static Stop Losses: Define your "uncap" loss before the trade is open. Moving your stop loss further away is a path to liquidation.
Check R:R: Only take trades where the Potential Reward is at least 2 times your Potential Risk (2:1 Ratio).
Common Risk Management Mistakes
❌ Revenge Trading
Doubling your position size after a loss to "make it back" is the fastest way to blow an account. Stick to the calculator.
❌ Mental Stop Losses
If the stop loss isn't in the system, it doesn't exist. Markets move faster than your emotions.
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OpenFrequently Asked Questions
How do I calculate position size from my risk per trade?
Position Size = (Account × Risk %) ÷ (Entry − Stop Loss). Example: $10,000 account, 1% risk = $100. If entry is $50 and stop is $48, that's $2/share risk → 50 shares. The calculator handles the math for any asset (stocks, forex pips, crypto coins).
What's a healthy risk-to-reward (R:R) ratio?
Aim for at least 1:2 — risk $1 to make $2. Better setups offer 1:3 or 1:4. Even with a 50% win rate, a 1:2 R:R is profitable in the long run. With a 1:1 R:R, you need 60%+ win rate to be profitable after fees and slippage.
How much should I risk per trade?
1–2% of account equity per trade is the gold standard for retail traders. At 1% risk you can survive a 10-trade losing streak with only 10% drawdown — plenty of room to recover. Risking 5%+ per trade puts you at serious risk of catastrophic drawdown over any reasonable trading horizon.
Should I always use a stop-loss?
Yes — without a stop-loss, you can't calculate position size, R:R, or expected loss. Every professional trader uses stops, even if they're mental stops kept off the broker's books. Set the stop where the trade thesis is invalidated (beyond support/resistance, or at a multiple of ATR).
How does fee/commission impact risk-per-trade?
Add total round-trip fees (open + close) to your dollar risk. On small positions, fees can be 5–10% of total risk, which materially affects the R:R ratio. The calculator's fee field lets you model this so the displayed R:R reflects net (after-fee) outcomes, not gross.
What's the difference between this and a Position Size Calculator?
They're closely related. This Trade Risk Calculator focuses on the relationship between risk %, R:R, and position size for any asset. The dedicated Lot Size / Position Size Calculators specialize in forex (lots, pips) and multi-asset (shares, contracts). All three solve the same equation from different angles.