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How many shares to buy so that if your stop-loss is hit, you lose no more than you decided in advance. That's the whole game.
Get Trendkept free — it does this on every trade →
The formula has no opinion and no conviction knob:
shares = (account × risk%) ÷ (entry − stop)
You decide two things in advance: how big your account is, and the most you're willing to lose on any single trade (usually 1–2%). The distance between your entry and your stop-loss then sets the size — automatically. A tighter stop means more shares for the same risk; a wider stop means fewer. The scary trade gets smaller by itself.
You can be wrong on more than half your trades and still come out ahead — if every loss is capped small and your winners are allowed to run. Position sizing is the mechanism that caps the loss. Skip it, size by gut, and one oversized trade can undo months of discipline. This is the single habit that separates traders who last from those who blow up.
Knowing the formula is easy. Running it on every trade, when the market's moving and you're excited, is the hard part — Trendkept is the free tool that does it for you and sends the stop-loss to your broker with the order, so the plan exists before the trade does.
Educational tool, not investment advice. Trendkept makes no personal recommendations. Trading involves risk of loss. Long positions only; figures assume you sell if the stop is reached. © Trendkept.