Reading room · Risk management · Published 2026-11-10

Position sizing: how much to buy

Decide how much you can lose on the trade first, then work out how many shares that allows.

Confirmed facts

• Shares to buy = money you will risk ÷ (entry price − stop-loss price).
• A stop-loss is an order that sells if the price falls to a level you chose in advance.

Historical data

• Many professional traders risk one percent or less of their capital on a single trade, so a run of losses is survivable.

Interpretation

• The rule keeps every loss small relative to your capital. It does not make any single trade more likely to win.

Sources

• Use the Position Sizing Calculator on this site

Educational content, not advice. Disclaimer