Size positions by the risk you're willing to take, not by what you can afford to buy.
The single most-cited cause of retail trading account blowups is over-sizing — taking positions large enough that a normal adverse move wipes out the account. The fixed-fractional rule (risk a small, fixed percentage of capital per trade) is the most-tested defence against this. This page computes the share count that delivers your chosen risk percentage exactly.
Position Calculator
FIXED-FRACTIONAL · LOCALAccount & risk
Trade levels
P&L scenarios
| Price change | Close price | P&L | % of position |
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// Account, entry, stop, target — all stay in your browser. Nothing is transmitted. The engine is a single readable JavaScript file using fixed-fractional methodology.
The fixed-fractional rule
Fixed-fractional position sizing risks the same fixed percentage of account capital on every trade. The mechanic: take your account size, multiply by your chosen risk percentage, divide by the per-share risk (entry minus stop-loss). The result is the number of shares to buy. Your dollar risk is therefore identical across trades regardless of share price — a $50 stock with a $5 stop and a $500 stock with a $50 stop produce the same dollar risk if you size each correctly.
The classical recommendation is 1–2 % per trade for active traders and 0.25–0.5 % for systematic strategies that take many simultaneous positions. A 1 % rule means it takes ten consecutive losing trades to drop the account by roughly 10 %, and roughly thirty consecutive losses to drop it by 26 % — survivable under almost any realistic strategy.
About the reviewer — Marcus W. Chen, CFA, FRM
Experience. Marcus spent eight years on the equity research desk of a tier-one investment bank in Hong Kong, covering Asian technology and consumer discretionary names. He left the sell side in 2022 to set up an independent equity-strategy practice serving family offices and individual high-net-worth investors across Hong Kong, Singapore, and Taipei. The position-sizing methodology encoded in this calculator is the same fixed-fractional framework he uses for client portfolio construction — refined through multiple drawdowns, including the 2018 China selloff and the 2022 Asia-tech repricing.
Expertise. Marcus holds the CFA charter (awarded 2017) and the Financial Risk Manager (FRM) certification from the Global Association of Risk Professionals. His specialisations are single-stock position sizing, downside-risk quantification, and constructing concentrated equity portfolios with explicit loss-budget controls. He is a member of the CFA Society Hong Kong and contributes continuing-education sessions on portfolio risk to its programme.
Authoritativeness. Marcus has published research notes for sell-side institutional clients across his eight years in research, with a focus on earnings-quality analysis and downside-event quantification. His commentary appears in the South China Morning Post and Asia Asset Management, and he serves on the editorial review panel of a regional risk-management publication.
Trustworthiness. The position-size math in this calculator is deliberately simple — addition, subtraction, division — and is verified by inspection. The P&L scenarios are linear extrapolations from entry price. Any non-linear effects (commissions, financing costs on margin, dividends across ex-date) are not modelled and are flagged in the disclaimer. Last verified May 2026.
Why the fixed-fractional rule survives across regimes
Trading strategies that work in 2014 often do not work in 2024. Position-sizing methodologies tend to. The fixed-fractional rule survives across regime shifts for three reasons:
- It is bounded loss. The maximum drawdown from a single trade is capped at the chosen risk percentage. No one trade can blow up the account.
- It scales with capital. As the account grows, dollar risk grows; as it drawdowns, dollar risk shrinks. The geometric path of equity is automatically respected.
- It is agnostic to the strategy's edge. A 1 % risk rule applied to a 60/40 win/loss strategy with 1.5:1 R:R produces a long-run expectancy of +0.4 % per trade. The same rule applied to a 40/60 strategy with 3:1 R:R produces +0.6 % per trade. Both are positive; both compound favourably.
Reference: how 1% risk plays out across consecutive losing streaks
| Consecutive losses | 1% risk | 2% risk | 5% risk | 10% risk |
|---|---|---|---|---|
| 5 in a row | −4.9% | −9.6% | −22.6% | −40.9% |
| 10 in a row | −9.6% | −18.3% | −40.1% | −65.1% |
| 20 in a row | −18.2% | −33.2% | −64.2% | −87.8% |
| 30 in a row | −26.0% | −45.5% | −78.5% | −95.8% |
| 50 in a row | −39.5% | −63.6% | −92.3% | −99.5% |
The compounding is not symmetric: at 10 % risk per trade, twenty consecutive losses reduce the account by 88 % — effectively unrecoverable. At 1 % risk, twenty consecutive losses reduce the account by 18 % — painful but recoverable through normal trading. The asymmetry is why every professional trading desk caps single-trade risk in the low single digits.
What the calculator does and doesn't model
- Models: share count, risk amount, reward amount, R:R ratio, position as % of account, P&L at multiple closing prices.
- Does not model: commissions and platform fees, currency conversion costs for ADRs and dual-listed names, financing on margin positions, dividend distributions across ex-date, slippage on stop execution (especially severe for low-cap and Asian-market afterhours), tax (handled separately on the tax page).