Position sizing
You plan to enter a long position at $100 and place the stop-loss at $96. You also decide that the maximum planned loss for the trade is $80. The next step is to calculate how many shares fit within this limit.
If price falls from the $100 entry to the $96 stop-loss, the planned loss is $4 per share. Every additional share adds another $4 to the total planned loss.
Position size = maximum planned loss ÷ risk per share
The result tells you how many shares fit within the maximum planned loss. Use the controls beside the chart to adjust the quantity. Watch the planned loss change until it reaches $80 without going above the limit.
In real trading, it is good practice to choose the entry and stop-loss before calculating the position size. These two prices determine the risk per share. If either price changes, calculate the position size again.
Use this order for every position: choose the entry, choose the stop-loss, decide the maximum planned loss, and calculate the position size.
Set the position size
Adjust the quantity until the planned loss equals $80.