What percentage of capital should I risk per trade?

The widely used convention is 1–2% of account capital per trade, with beginners and volatile instruments toward the lower end. The right number is the one that keeps an ordinary losing streak — seven to ten trades — survivable in both capital and composure.

Is position size the same as position value?

No. Position value is quantity × price — your exposure. Risk is quantity × (entry − stop) — what you lose if the stop holds. A tight stop lets a small risk budget control a large position; a wide stop forces a small one. The calculator shows both so the difference stays visible.

How do I size positions for NIFTY or Bank NIFTY futures?

Same formula, then round down to whole lots at the current exchange lot size (check NSE’s contract specifications — lot sizes change by circular). If one lot already exceeds your risk budget at your stop distance, the position is too large for the account regardless of conviction.

Does this work for options positions?

For long options, yes — risk per unit is at most the premium paid, or entry premium minus your stop premium if you exit early. Short options are different: potential loss is not defined by premium, so premium-based sizing understates risk badly; size short-option structures by their maximum realistic loss, with margin and gap risk in mind.

Free tools · Risk

Position size calculator — how much to trade, from risk backwards

Last updated: September 2026

Short answer

Position size = (account capital × risk per trade %) ÷ (entry price − stop-loss price). Risking 1% of a ₹5,00,000 account (₹5,000) on a trade with entry ₹500 and stop ₹490 means ₹10 of risk per share, so the position is 500 shares — ₹2,50,000 of exposure, but only ₹5,000 at risk if the stop holds. Size from the stop backwards, never from conviction forwards.

Account capital (₹) Risk per trade (%) Entry price (₹) Stop-loss price (₹)

Capital at risk

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Risk per share

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Position size

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Position value

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Capital deployed

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Reference: shares to buy on a ₹5,00,000 account, entry ₹500

Shares = capital × risk % ÷ (entry × stop distance), rounded down. Multiply proportionally for other account sizes.

Risk per trade	₹ at risk	1% stop	2% stop	3% stop	5% stop
0.5%	₹2,500	500	250	166	100
1%	₹5,000	1,000	500	333	200
2%	₹10,000	2,000	1,000	666	400

Position sizing is the risk decision most traders make backwards: they pick a quantity that feels right, then discover what they were risking when the stop hits. The professional order is reversed — decide what fraction of capital a single losing trade may cost, measure the distance to your stop, and let those two numbers dictate quantity. Same strategy, same signals; the sizing rule alone often separates the account that survives a losing streak from the one that does not.

Enter your capital, risk percentage, entry and stop below. The calculator returns the quantity, the exposure it implies, and the rupee amount actually at risk.

The fixed-fractional method, and why 1–2% is the convention

Risking a fixed fraction of capital per trade has a compounding logic: losses shrink your risk in rupees as capital falls, which makes total ruin mathematically slow, while wins scale risk up as capital grows. At 1% risk per trade, a brutal streak of ten straight losses draws capital down about 9.6% — painful, recoverable. At 10% risk per trade, the same streak destroys 65% of the account, from which recovery requires nearly tripling what remains.

Losing streaks are not tail risk — they are certainties. A strategy winning 50% of the time has roughly an even chance of hitting seven consecutive losses somewhere in 500 trades. The risk fraction is what decides whether that inevitable streak is an entry in the trade log or the end of the account.

Sizing in lots, and where the formula bends

For F&O the same arithmetic applies with one constraint: quantity comes in exchange-set lots, so round the computed quantity down to whole lots — down, not up, because rounding up silently raises risk past your chosen fraction. If even one lot implies more risk than your rule allows, the honest conclusion is that the trade is too big for the account, not that the rule needs bending.

Two more honest caveats. Stops are not guarantees: gap opens and fast markets can fill you beyond the stop, so treat the calculated risk as the planned minimum, not a ceiling. And per-trade sizing does not cap portfolio risk — five 1%-risk positions that move together are closer to one 5% bet; correlated exposure needs its own limit.

From a sizing rule to an enforced system

A sizing rule only protects you when it is applied on every trade — including the ones taken angry, tired or revenge-driven, which is exactly when it gets abandoned. This is one of automation’s quietest advantages: a rule enforced in software cannot be talked out of.

INDfolio AI applies position limits, per-trade risk and account-level daily loss caps in the cloud on every strategy it runs, and its backtests size positions by the same rules — so the drawdowns you see in simulation were produced by the sizing you will actually trade.

These calculators are free, run entirely in your browser, and store nothing. They produce estimates for NSE trades based on published rates and standard formulas — not investment advice, and not a substitute for your broker’s contract note. INDfolio AI builds algo trading software; the honest connection is that our backtests apply this same cost arithmetic to every simulated trade.