Trade Risk Calculator
Set a stop at a chart level or a percentage from entry and see how many shares fit your risk limit and how large that position is against your account.
Shares that fit your risk limit
50
Loss at the stop $1,000.00
Shares that fit your risk limit
50
Loss at the stop $1,000.00
- Risk limit
- $1,000.00
- Loss at the stop
- -$1,000.00
- Stop price
- $880.00
- Stop distance from entry
- 2.22%
- Position value
- $45,000.00
- Position as a share of account
- 90.0%
- Profit at the target
- +$3,000.00
- Reward multiple
- 3.00R
How to calculate trade risk
A stop can come from the chart, such as a price below a support level, or from a fixed percentage below entry. Either way the stop sets the size: a wider stop means fewer shares for the same dollar risk.
The line to watch is the position as a share of your account. A tight stop can produce a position larger than the account, which needs margin and leaves you exposed if the stock gaps through the stop.
Risk limit = account × risk %. Shares = risk limit ÷ |entry − stop|. Reward multiple = |target − entry| ÷ |entry − stop|.
Worked example
On a $50,000 account with a 2% limit, you can lose $1,000. Buying at $900 with a stop at $880 risks $20 a share, so 50 shares fit.
Those 50 shares cost $45,000, which is 90% of the account, even though the planned loss is only 2%. A target of $960 is worth $3,000, or 3R. If 90% of the account in one stock is too much, the position has to shrink further than the risk rule alone asks.
What the result does not account for
- Overnight gaps and halts, which can fill your stop well past its price.
- Commissions, slippage and any cost of margin.
- Risk from other open positions, because this looks at one trade at a time.
Frequently asked questions
Should I use a support level or a percentage stop?
A chart-level stop ties the exit to the reason for the trade, while a percentage stop is simpler and works when no level is clear. Both methods here give the same output, so you can test one against the other on a single trade.
How much of my account does a losing streak take at each risk level?
Ten straight losses cost 18.3% of the account at 2% risk per trade and 40.1% at 5% risk, because each loss is taken on the smaller balance left by the one before it.
Related calculators
- Position Size CalculatorTurn your account size, risk percentage and stop into the number of shares, lots or contracts to trade in stocks, crypto, forex or futures.
- Drawdown CalculatorSee how many losses in a row reach a given drawdown at your risk per trade, what gain recovers it, and how likely that streak is.
- Kelly Criterion CalculatorFind the growth-maximizing share of your account to risk from your win rate and payoff ratio, along with half and quarter Kelly.
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