A position size calculator is a must have resource for every trader.
Why spend time manually calculating how many shares you should enter every time you place a trade?
Not only does it take up unnecessary time, but manual calculations are prone to errors.
We believe there are at least 4 factors that go into optimal position sizing for swing and position traders.
- Customizable risk per trade thresholds based on your own risk preferences.
- Position sizing based on the distance between the entry and stop loss.
- Position sizing based on the volatility of the underlying instrument.
- Fixed fractional position sizing based on a percentage of your overall account.
- Optional: is the position a non-leveraged and liquid ETF? If so, a higher threshold of capital allocation may be permitted (aka max capital committed for stocks 10%, max capital for ETFs could be 20%).
The Trade Risk's position size calculator blends together all of the above constraints to provide a reliable, sleep easy position size on every new trade placed.
The goal is to have a meaningful amount of exposure per trade while also protecting ourselves from overnight risks and volatility.
Here's a screenshot of the calculator:
If you are interested in learning more about the topic of position sizing, be sure to check out our blog post: How to Position Size as a Swing Trader. For those who would like to purchase a copy of the calculator, please see the link below.