Objective-based risk sizing

Position Sizing Calculator

Estimate your 1R dollar risk, expected return, expectancy, and likely drawdown from a system’s objectives. Useful for finding the trade size that fits the goal without quietly inviting ruin to dinner.

1R risk amount $1,000 1.00% of $100,000
+100.0%expected return
+1.00Rexpectancy
$1,000expectancy / trade
0.0%p95 max drawdown

Readout

This setup has positive expectancy. Now check whether the drawdown is survivable.

Suggested workflow

Change risk per trade until expected return and drawdown both fit your objectives.

Example equity curve

Monte Carlo drawdown distribution

How to use it

  1. Enter your capital, trade sample size, win rate, and risk/reward.
  2. Adjust risk per trade until the expected return is close to your objective.
  3. Check the estimated drawdown. If it is too high, reduce risk per trade. Annoying, yes. Usually wise.
  4. Your 1R risk amount is the dollar amount to use when calculating live trade size from stop distance.