Input a number into the box to see how the current risk parameters of the trade are affected with leverage. With leverage you can take a larger position size, but that means our stop loss must move closer to the entry so that we don't risk more than the desired % or $ amount of our account (Account Risk above).
Inputting 10 into the box means the original position size calculated above is multiplied by 10.
Leverage increases the buying power of the capital in your account. 10:1 leverage means you can make trades with a value 10x the capital in your account. 100;1 means your capital is magnified 100 times. For example, if you have $10,000 in the account and 50:1 leverage, you can purchase up to $500,000 in positions. Trading on leverage allows for larger position sizes which can increase both profits and losses on trades.
Use this position size calculator to determine how much of an asset you should buy based on a selected risk tolerance and your account size. Position size is a key element of any strategy. No strategy wins all the time, so if you risk too much your account may be decimated with a few losing trades. Risk too little and your capital isn't being used efficiently and potential profits will be tiny. This position size calculator shows you the correct position size for your trade levels, and also lets you see how the profit and loss is affected by other scenarios.
Using multiple targets is called "scaling" out of a position. Use the boxes below to specify the prices at which you will sell a portion of the position, as well the percentage of the position you'll exit at each price target. The calculation will give you the total profit on invested funds if all the profit targets are reached.
This is the total profit when accounting for multiple exits at different target prices. It is the sum of profits accumulated with each sale. For example, Target 1 Profit $ + Target 2 Profit $, and so on.
Input a number into the box to see how the current risk parameters of the trade are affected with leverage. With leverage, you can take a larger position size, but that means your stop loss must move closer to the entry so that you don't risk more than the desired % or $ amount of your account (see Account Risk above). Inputting 10 into the box means the original position size calculated above is multiplied by 10. Leverage increases the buying power of the capital in your account. 10:1 leverage means you can make trades with a value 10x the capital in your account. 100;1 means your capital is magnified 100 times. For example, if you have $10,000 in the account and 50:1 leverage, you can purchase up to $500,000 in positions. Trading on leverage allows for larger position sizes which can increase both profits and losses on trades.
If you multiply your position size above by the number in the Leverage box, the Long and Short Leveraged Stop Loss show where your stop loss needs to move to so as not to exceed your desired risk to the account. If the stop loss doesn't get closer to the entry, and you increase your position size, you will lose more than you originally wanted should you hit the stop loss you set.
Assume you wish to Buy Apple (AAPL) at $125. You have a $30,000 account and 2:1 leverage ($60,000 buying power). You're comfortable losing up to 2% of the account (0.02 x $30,000 = $600) on the trade. Your stop loss is $120, $5 below the entry price. Account Risk $ / risk on trade) = position size. The risk on the trade is the difference between the entry and stop loss price. $600 / $5 = 120 shares In this situation, 120 shares is the ideal position size for risking 2% of the account with that stop loss and account size. 120 shares x $125 (price of shares) = $15,000 This is how much capital is required to take the position. No leverage is required since it is less than the account balance ($30,000). Working backwards, if you bought 120 shares and lost $5/share, the loss would be $600, or 2% of the $30,000 account.
Assume you wish to buy the EUR/USD for a day trade at 1.0525. You have $5,000 in your account and 50:1 leverage from your broker. You are comfortable losing up to 1% of the account (0.01 x $5000 = $50) on a trade and your stop loss is 5 pips (1.0520). Let's calculate the position size. You can risk up to $50 on the trade. Each pip of movement in the EURUSD is $10 per standard lot (you need to know this or use the pip value calculator). Your stop loss is 5 pips away. Account Risk $ / risk on trade) = position size in standard lots. Risk on trade for forex is the difference between the stop loss and entry, multiplied by the pip value. $50 / ($10 x 5pips) = 1 In this case, "1" means 1 standard lot. We know it is a standard lot, and not mini or micro lots, because the pip value for a standard lot ($10) was used in the calculation. This is the ideal position size for this account, stop loss size, and risk tolerance. A standard lot is €100,000 in the EUR/USD, or $105,250 based on the current price/exchange rate. This is the $ Amount of Position. With $5000 in the account, this position requires at least 21 leverage ($105,250 / $5000).