The formula
Position size = planned risk amount ÷ risk per unit (entry minus stop).
Worked example
Account ₹1,00,000, risk 1% (₹1,000). Buy at ₹500, stop at ₹480, so the risk per share is ₹20. ₹1,000 ÷ ₹20 = 50 shares. With a stop at ₹460 (₹40 away) the same rule gives 25 shares: the risk stays the same and the size changes.
Use the position-size calculator on this site to try your own numbers.
Educational content only. It is not investment advice or a recommendation, and trading carries a high risk of loss. Figures are illustrative.
Go deeper: Risk Management and Position Sizing
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