Position sizing converts a trading idea into a measurable risk decision. The quantity should come from the risk plan—not from excitement, conviction or available buying power.
Define the maximum planned risk
If trading capital is ₹1,00,000 and planned risk is 1%, the maximum planned loss for the setup is ₹1,000. This amount becomes the risk limit before entry and stop prices are considered.
Measure price risk
Price risk is the absolute difference between the planned entry and stop. An entry at ₹100 with a stop at ₹95 creates ₹5 of risk per unit.
Entering the intended order quantity then shows the actual rupee risk for that trade, before costs, liquidity and product-specific margin are considered.
Use the calculator as a planning aid
The Trade Firm Risk Planner makes this relationship visible and shows how the entered quantity changes actual capital at risk before execution.