Risk Amount Calculator

How to use this tool

1. Enter the current account balance.
2. Enter the percentage allowed by your written per-trade risk plan.
3. Add risk still open on other positions.
4. Enter your separate daily risk budget.
5. Use the smaller displayed cap when several positions could lose together.
6. Convert the final dollar amount into position size using the Position Size Calculator.

See the calculation in context

A $50,000 balance at 0.5% risk produces a $250 maximum planned loss. If $850 of a $1,000 daily budget is already committed, the conservative next-trade cap becomes $150.

Calculation method

Risk amount = account balance × (risk percentage ÷ 100). Conservative next-trade cap = the smaller of the per-trade risk amount and the remaining daily risk budget.

Common mistakes

1. Treating the calculated amount as a required amount to risk
2. Ignoring correlated or simultaneously open trades
3. Using the firm’s entire remaining drawdown as a daily budget
4. Failing to update the current balance
5. Forgetting commissions, gaps and slippage

Questions and answers