Size the trade from the stop, not from the balance. Enter your account, the percentage you are willing to lose, your entry and your invalidation level — the position falls out of those four numbers.
Last verified 13 September 2026 · written by the DexLadder team
Risk amount—
Risk per unit—
Position size (units)—
Position value—
Margin required—
Position as % of account—
The formula
units = (account × risk%) ÷ |entry − stop|
Everything else follows. Notice what the formula does not contain: your confidence, the amount you can afford, or how good the setup looks. A wider stop produces a smaller position for the same risk, which is the mechanism that keeps a volatile asset from quietly becoming your largest bet.
Worked example
A $10,000 account risking 1% is risking $100. Entry at 50.00 with a stop at 47.50 gives 2.50 of risk per unit, so the position is 100 ÷ 2.50 = 40 units, or $2,000 of exposure — 20% of the account at 1% of risk. Move the stop to 45.00 and the same $100 of risk buys only 20 units.
Three ways this goes wrong
Sizing first, stop second. Choosing the position and then finding a stop that fits it inverts the logic and makes risk a function of comfort.
Ignoring volatility. A 3% stop on an asset that routinely ranges 6% a day is a random exit. Set the distance from something measured, such as a multiple of ATR.
Forgetting costs. Fees and slippage widen the effective loss beyond the stop distance, particularly on thin pairs.
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Questions people actually ask
What risk percentage should I use?
Most risk frameworks put a single discretionary trade between 0.5% and 2% of the account. At 1%, ten consecutive losses still leave about 90% of capital; at 10%, they leave 35%.
Does leverage change my position size?
No. Leverage changes the margin you must post, not the size your risk allows. The calculator shows both so the difference is visible.
Where should the stop go?
At the price that proves the idea wrong — a structural level or a volatility-based distance — never at a round number chosen to justify a larger position.