Account Risk Limit Calculator

How to use this tool

1. Enter the current account balance and your written maximum aggregate risk percentage.
2. Add the full stop-based risk on open positions.
3. Include pending orders that could activate before other risk is removed.
4. Add a safety buffer when positions may become correlated or execution may worsen.
5. Enter the planned risk for the next trade.
6. Use the smaller displayed cap and recalculate whenever balance, stops, orders or correlations change.

See the calculation in context

A $50,000 account with a 2% aggregate limit has a $1,000 ceiling. If $500 is open and a 20% correlation buffer is applied, adjusted exposure is $600 and estimated remaining capacity is $400.

Calculation method

Account risk ceiling = current balance × maximum aggregate risk percentage. Buffer-adjusted exposure = (open risk + pending-order risk) × (1 + safety buffer percentage). Remaining capacity = ceiling − adjusted exposure, never below zero.

Common mistakes

1. Using margin instead of stop-based loss exposure
2. Ignoring pending orders
3. Assuming correlations remain stable
4. Counting offsetting positions as risk-free
5. Setting the limit equal to a prop firm’s full drawdown allowance
6. Forgetting fees, gaps and slippage

Questions and answers