beginner · 8 min · July 18, 2026

Position sizing without guesswork

Tie every trade to a fixed equity risk percent so one stop cannot wipe the month.

By Aisha Rao Verified · 4.9★

The formula

Position size (units) = (Balance × Risk %) ÷ |Entry − Stop|

Workflow

  1. Decide risk percent (often 0.25–1%)
  2. Place stop at thesis invalidation
  3. Size units from the formula — not from FOMO

Open the position size calculator and journal the inputs.

Educational only — not trading advice.

Quick quiz

1. Position size (units) equals…

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Smitvi Academy is educational only — not investment, trading, or tax advice. Full disclaimer