Find the exact number of shares to buy based on your stop-loss and the 1% risk rule. Works for equity delivery, intraday and F&O. Live risk-to-reward ratio, max loss and required capital.
Shares are rounded down so your actual risk never exceeds your planned risk. For F&O, multiply entry by lot size and treat "shares" as units.
Position sizing is the single most important rule in trading. It matters more than your entry signal, more than your chart pattern, and more than the news. Most retail traders blow up not because they pick bad trades but because they bet too big on each one. The 1% rule fixes this permanently, and the math takes ten seconds to run.
Step one: decide your maximum risk per trade as a percentage of your capital. Beginners should start with 0.5% to 1%. Experienced traders with a proven edge can scale up to 2%, but never more. If you trade with 1% risk, you can be wrong 20 times in a row and still keep 81% of your account. That is what survival looks like in this business.
Step two: define your stop-loss before you enter. The stop must be based on the chart — a swing low for long trades, a swing high for short trades, or a technical level like a pivot or moving average. Never set a stop based on a round number like "2% below entry" unless that happens to align with a real level. A stop that is too tight will get hit by noise; a stop that is too loose will give back your winners.
Step three: calculate risk per share as the distance between entry and stop. Step four: divide your capital at risk by the risk per share to get the exact number of shares. Round down to protect yourself from any rounding error. That is it. Our calculator above does all four steps instantly — you just type in the numbers.
| Account | Risk % | Entry | Stop | Shares | Max Loss |
|---|---|---|---|---|---|
| ₹1,00,000 | 1% | ₹500 | ₹490 | 100 | ₹1,000 |
| ₹5,00,000 | 1% | ₹500 | ₹490 | 500 | ₹5,000 |
| ₹10,00,000 | 0.5% | ₹1,200 | ₹1,180 | 250 | ₹5,000 |
| ₹25,00,000 | 1% | ₹2,500 | ₹2,450 | 500 | ₹25,000 |
Notice how the tighter the stop, the bigger the position. This is the real power of position sizing — tighter stops mean more shares with the same dollar risk, which means bigger potential rewards.
Here is the uncomfortable truth: most retail traders in India trade far too large on every position, often risking 10% to 20% of their capital on a single idea. They do this because small positions feel boring and big positions feel exciting. But the market does not care about your feelings — it will punish oversized bets with mathematical certainty.
The professionals who last decades in this business all follow the same core rule: small risk per trade, many trades, let probability do the work. You do not need to predict the market correctly most of the time. You just need to survive long enough for your edge — whatever it is — to play out across hundreds of trades. Position sizing is what keeps you in the game.
Position sizing is the process of deciding how many shares or lots to buy in a single trade so that your loss stays within a pre-defined limit if the stop-loss is hit. It is the single most important rule in risk management — more important than entry signals, charts, or news — because it is the only thing that protects your capital from a bad trade or a losing streak.
The 1% rule says you should never risk more than 1% of your total trading capital on a single trade. If your account is ₹5,00,000, you never lose more than ₹5,000 per trade, no matter how confident you feel. With a 1% rule, you can have 20 losing trades in a row and still have 81% of your capital left to keep trading. Without it, three or four bad trades can wipe you out.
The formula is: Position size = (Account × Risk%) ÷ (Entry − Stop). Example: account ₹5,00,000, risking 1% = ₹5,000. If you buy at ₹500 with a stop at ₹490, risk per share is ₹10, so you can buy ₹5,000 ÷ ₹10 = 500 shares. Our calculator above does this math instantly for long and short trades and rounds down to whole shares.
Most professional traders aim for a minimum R:R of 1:2, meaning the potential profit is at least twice the maximum loss. With a 1:2 R:R, you only need to be right 40% of the time to be profitable. A 1:3 R:R lets you be wrong 60% of the time and still make money. Always check R:R before entering a trade — if it is below 1:1.5, skip the trade.
Yes. The math is identical for equity delivery, intraday and F&O. For futures and options, just use the lot size × number of lots as your share count. The stop-loss and entry are still in rupees per unit. One thing to remember: intraday and F&O use margin, so the required capital shown is the position value — the actual margin you block with your broker is a fraction of that.
Always round down so your actual risk never exceeds your planned risk. If the formula says 473.8 shares, buy 473 — not 474. This one habit protects you from accidentally exceeding your 1% rule on every trade and keeps your long-run risk clean.