Adam Khoo Position Sizing Calculator Download
'/%3E%3Ccircle cx='48' cy='39' r='19' fill='%23f2c9a5'/%3E%3Cpath d='M27 35c3-16 39-17 42 2-8-8-27-9-42-2z' fill='%23374151'/%3E%3Cpath d='M21 86c5-24 49-28 56 0z' fill='%232563eb'/%3E%3Ccircle cx='41' cy='41' r='2' fill='%23111827'/%3E%3Ccircle cx='55' cy='41' r='2' fill='%23111827'/%3E%3Cpath d='M42 52c4 3 9 3 13 0' stroke='%2392400e' stroke-width='3' fill='none' stroke-linecap='round'/%3E%3C/svg%3E)
Reviewed by Calculator Editorial Team
This guide explains Adam Khoo's position sizing method for trading, provides a downloadable calculator, and explains how to use it effectively.
What is Position Sizing?
Position sizing is the process of determining how much capital to risk on each trade. Proper position sizing helps traders manage risk, maintain consistency, and avoid large drawdowns. Adam Khoo's method is a popular approach that balances risk and reward while accounting for account size and risk tolerance.
Key benefits of proper position sizing:
- Reduces emotional decision-making
- Helps maintain discipline during market volatility
- Allows for consistent trading over time
- Protects capital from large drawdowns
Adam Khoo's Position Sizing Method
Adam Khoo's position sizing formula is based on the concept of risking a consistent percentage of capital per trade. The formula is:
Position Size = (Account Size × Risk Percentage) / Risk per Share
Where:
- Account Size - Total capital available for trading
- Risk Percentage - Percentage of account you're willing to risk per trade (typically 1-2%)
- Risk per Share - The amount of money lost per share if the trade goes against you
This method ensures that each trade risks the same percentage of your account, helping to maintain consistency and control risk.
| Account Size | Risk % | Stop Loss per Share | Position Size |
|---|---|---|---|
| $10,000 | 1% | $1.00 | 100 shares |
| $10,000 | 2% | $1.00 | 200 shares |
| $50,000 | 1% | $2.50 | 200 shares |
How to Use This Calculator
Our downloadable calculator makes it easy to determine your optimal position size. Simply enter your account size, desired risk percentage, and stop loss per share, then click "Calculate". The calculator will show you the recommended position size and display a chart of your risk profile.
Calculator features:
- Simple input fields for all required values
- Clear display of calculated position size
- Visual chart showing risk distribution
- Downloadable results for your records
Example Calculation
Let's say you have a $20,000 account and want to risk 1.5% of your capital per trade. If your stop loss is $1.25 per share, here's how to calculate your position size:
Position Size = ($20,000 × 1.5%) / $1.25 = 300 shares
This means you should position 300 shares for each trade, risking $375 per trade ($300 × $1.25). This represents 1.5% of your $20,000 account.
FAQ
What is the ideal risk percentage for position sizing?
The ideal risk percentage varies by trader and market conditions. Adam Khoo typically recommends 1-2% per trade for most traders, but this can be adjusted based on your account size and risk tolerance.
How often should I adjust my position sizes?
You should review and adjust your position sizes whenever your account size changes significantly or when market conditions change. Generally, it's good practice to review your position sizing at least quarterly.
Can I use this calculator for options trading?
Yes, you can adapt this calculator for options trading by using the maximum potential loss per contract as your "risk per share" value in the formula.