Position size is the risk control you actually control
You cannot control whether a trade works. You can control exactly what it costs you when it does not, and that number is decided entirely before you enter — by where the stop-loss goes and how many shares you buy. Fixed fractional sizing collapses those two decisions into one arithmetic step: choose the percentage of capital you are willing to lose on a single idea, divide that rupee budget by the rupee risk per share, and the quantity falls out.
The order matters more than the formula. Most retail traders decide the quantity first — a round 100 shares, or however many ₹50,000 buys — and then hunt for a stop that "looks about right". That is backwards. It makes the loss on each trade a function of the share price rather than of a deliberate risk decision, so a ₹3,200 large cap and a ₹45 small cap end up carrying completely different downside for the same nominal position.
How to use this calculator
- Enter the capital this trade is sized againstUse the pool you actually trade, not your total net worth. If ₹5 lakh is your trading account and the rest is long-term holdings, the ₹5 lakh is the number.
- Set risk per trade as a percentageThis is the fraction of capital you accept losing if the stop is hit. It should be the same for every trade in a strategy, decided once, not adjusted by how confident you feel today.
- Enter the entry price and the stop-lossThe stop is the price at which the trade idea is proven wrong — a level below structure, or a volatility-based distance. Not a round number, and not the maximum you can stomach.
- Read the quantity and the rupee riskThe quantity is what you place. The rupee risk is what you lose if the stop fills at its level. Check that the risk-as-percent-of-capital figure equals what you set.
How much should you risk per trade?
The honest way to choose is to look at what a normal losing streak does to your capital. Losses compound the same way gains do. The table below is just repeated multiplication — the drawdown after twenty consecutive full-stop losses at each risk level.
| Risk per trade | Drawdown after 20 straight losses | What that means |
|---|---|---|
| 0.25% | 4.9% | Barely noticeable. Requires a large account for the position sizes to be practical. |
| 0.5% | 9.5% | A common systematic default. A bad month is survivable and psychologically recoverable. |
| 1% | 18.2% | Aggressive but defensible with a tested edge and strict discipline. |
| 2% | 33.2% | A third of the account on a streak that any strategy will eventually produce. |
| 5% | 64.2% | Effectively a bet on not having a bad run. Recovery needs a 179% gain. |
Twenty consecutive losses sounds extreme. It is not — a strategy that wins 45% of the time will hit a run of that length given enough trades, and the point of choosing a risk percentage is to still be trading when it happens. The right number is the largest one whose worst-case drawdown you would sit through without abandoning the strategy.
Size every position against live holdings, not a blank form
AIVITTA reads your actual broker positions, tracks risk per open trade and flags when a new position would push total exposure past your limits.
Where position sizing goes wrong
Widening the stop to fit the size you wanted
The most common failure, and the hardest to see in yourself. The calculator returns 60 shares, you wanted 200, so the stop moves from ₹1,400 to ₹1,435 and suddenly 200 fits. The arithmetic is now correct and the risk management is gone — the stop no longer marks the point where you were wrong, it marks the point where the size you wanted becomes affordable.
Sizing every trade off full capital while several are already open
Risking 1% per trade on five simultaneous open positions is a 5% risk decision, not a 1% one, and if those five are all NSE mid-cap industrials it behaves like a single 5% bet. Either cap the number of concurrent positions or size against remaining unallocated risk.
Treating correlated positions as independent
Two PSU banks, or a stock and a long index future, do not diversify each other in a drawdown. Correlation collapses toward one exactly when you need it not to. Read understanding portfolio risk for how this behaves across a whole book, and check yours with the portfolio concentration checker.
Cash market versus F&O
This calculator assumes the cash market: you pay for the shares, so quantity is capped by capital. In futures and options, margin means notional exposure can be many times your capital, and the risk calculation stops being about affordability and becomes purely about the stop. The risk-per-trade arithmetic is identical — rupee budget divided by rupee risk per unit — but the capital cap no longer protects you, and gap risk can take a position past its stop before any order fills. If you trade derivatives, read F&O risk management first.
Once the size is set, the other half of the job is placing the stop somewhere defensible. The ATR stop-loss calculator sizes it to the instrument's own volatility, and the R-multiple glossary entry explains how to measure results in units of risk rather than rupees.