Sizing from your stop fixes the dollars at risk if the stop is hit (before fees and slippage). It does not account for gaps through your stop or partial fills. Educational, not financial advice.
How it works
Risk a fixed slice of your account — say 1% — and let the stop distance set the size: units = (account × risk%) ÷ |entry − stop|. Tight stops allow bigger size for the same risk; wide stops force smaller size. The point is consistency: every trade loses the same amount when wrong, so variance can’t wreck the account. Thin liquidity widens real slippage, so size down where the book is thin.
Worked example. A $10,000 account risking 1% puts $100 on the line. Enter at 100 with a stop at 95 — a $5 risk per unit — and the size is $100 ÷ $5 = 20 units ($2,000 notional, about 0.2× the account). Move the stop to 98 and the tighter $2 risk allows 50 units for the same $100; widen it to 90 and you can only hold 10. Notice the dollars at risk never change — only the size does. That is what keeps a losing streak survivable.
FAQ
How do you calculate position size?
Decide how much of your account to risk on the trade (e.g. 1%), then divide that dollar risk by the distance from your entry to your stop-loss. That gives the number of units to trade so the stop, if hit, loses exactly your intended risk.
How much should you risk per trade?
A common rule of thumb is 0.5%–2% of account equity per trade, so a string of losses cannot ruin the account. The right number depends on your strategy and risk tolerance; this is not financial advice.
Why size from the stop instead of leverage?
Sizing from your stop-loss fixes how much you lose if wrong, regardless of leverage. Leverage just determines the margin required for that position — risk is set by stop distance and size, not by the leverage number.
How does stop distance change position size?
Inversely. For the same dollar risk, a tighter stop lets you hold more units and a wider stop forces fewer — because the loss per unit is smaller or larger. That is the point of the method: your risk stays constant while the size flexes to fit where your invalidation actually is, rather than picking a size first and hoping the stop fits.
Does this account for slippage and gaps through my stop?
No. The calculator assumes you exit exactly at your stop price. In fast or thin markets price can gap past it, so the realized loss can exceed your planned risk — one reason to size down where the order book is thin. Treat the figure as your intended risk under normal conditions, not a guaranteed maximum.
Learn the concepts
Sizing is only as good as the fills behind it. Learn why liquidity and price impact make a large order slip further than the mid suggests, and read the order flow to place stops where the book, not a round number, defines invalidation. VYX shows tradable depth per market on the live scanner.