Stocks & Investing · Introduction
Risk/Reward & Position Sizer
Set a loss limit per trade to calculate share count and 1:2/1:3 profit targets.
Updated 2026-10-25 · ThinkVault Tools
What can this tool help you do?
Set a loss limit per trade to calculate share count and 1:2/1:3 profit targets.
Check the purpose and assumptions, then open the tool. Return to the guide for details.
How does risk-based position sizing work?
How does risk-based position sizing work?
Position sizing starts with the maximum dollar amount your account can afford to lose if a stop-loss is hit, then divides that risk budget by the per-share distance between your entry price and stop-loss price to determine the maximum share count.
Example: risking 1% of a $50,000 account
With a $50,000 account and a 1% risk limit ($500 max loss), entering at $100 with a stop-loss at $95 ($5 risk per share) gives a position size of $500 ÷ $5 = 100 shares ($10,000 capital used), alongside 1:2 ($110) and 1:3 ($115) reward targets.
Method
Amount at risk = Account size × Risk %; Position size = floor(Amount at risk ÷ |Entry price − Stop-loss price|). Board lots vary by security; verify the actual lot. 1 means whole shares; no ticker-based guess is made.
Before you begin
Beta · Set a loss limit per trade to calculate share count and 1:2/1:3 profit targets.