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⚠️ Trading Risk Calculator

Calculate your ideal position size, dollar risk, and risk-to-reward ratio for any trade. Enter your account size, risk tolerance, entry, stop loss, and take profit levels to trade with precision.

Risk Calculation Formulas

Dollar Risk = Account Size × Risk% ÷ 100
Position Size = Dollar Risk ÷ |Entry − Stop Loss|
Risk : Reward = |Take Profit − Entry| ÷ |Entry − Stop Loss|
Expected Value = (Win Rate × Reward) − ((1 − Win Rate) × Risk)

How to Use the Risk Calculator — Step by Step

  1. 1
    Enter Account Size
    Your total trading capital available in your brokerage account.
  2. 2
    Set Risk Percentage
    The percentage of your account you are willing to lose on this one trade. 1-2% is considered standard risk management.
  3. 3
    Enter Entry & Stops
    Input your planned entry price, the stop loss level where you would exit at a loss, and your take profit target.
  4. 4
    Add Win Rate (optional)
    If you know your historical win rate, enter it to calculate the expected value per trade over many trades.
  5. 5
    Review Your Risk Plan
    The calculator shows how many shares/units to buy, your maximum dollar loss, and whether the trade has a favorable risk-to-reward ratio.

Real-World Example

$10,000 account, 1% risk, entry at $100, stop loss at $95, take profit at $115.

Dollar Risk = $10,000 × 1% = $100
Position Size = $100 ÷ ($100 − $95) = 20 shares
Risk : Reward = ($115 − $100) ÷ ($100 − $95) = 3 : 1
At 50% win rate — EV = (0.5 × $300) − (0.5 × $100) = +$100 per trade

Frequently Asked Questions

Risk per trade is the maximum amount of money you are willing to lose on a single trade, expressed as a percentage of your account. Most professional traders risk 1-2% per trade to protect their capital over the long run.

A ratio of at least 1:2 is generally considered acceptable — meaning your potential profit is twice your potential loss. With a 1:3 ratio you can be profitable even with a 40% win rate.

Divide your dollar risk amount by the distance between your entry and stop loss. For example, $100 risk with a $5 stop distance gives you a position of 20 units.

The Kelly Criterion is a formula to determine the optimal bet size: f = (bp − q) ÷ b, where b is the reward:risk ratio, p is win probability, and q is loss probability. Many traders use half-Kelly to reduce volatility.

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