How much of my capital do I risk on a single trade?
The common rule among disciplined traders is 1% to 2% of capital per trade. The number itself is not sacred. The point is to survive a run of losses in a row without your account dropping out of the game. At 2% you need ten losses in a row to lose about 20%.
How do I calculate the number of shares?
Shares = (capital × risk %) ÷ (entry price − stop-loss price). The bottom part is your loss per share. Example: a $10,000 account at 1% risk equals $100, and a stop $2 away from entry gives a size of 50 shares.
Why does the math start from the stop-loss and not from the amount I want to invest?
Because the stop sets your actual loss, not the amount you spend. If you decide “I'll buy $5,000 worth”, you don't know how much you can lose. If you decide “I won't lose more than $100”, you size the position from that. The first is a hope, the second is a calculation.
What risk/reward ratio is acceptable?
It measures the target gain against the accepted loss. At 1:2, a success rate above 34% is enough to break even in theory; at 1:1, you need above 50%. There is no single right number: a low ratio with a high success rate can beat a high ratio with a low one.
Why does the suggested risk percentage change with macro confidence?
Because market conditions are not fixed. When liquidity and volatility signals line up in one direction, the math can take a size closer to your cap; when they conflict, the size is cut before the market cuts it. The tool sets the size and does not promise the trade's outcome.
Can the position value exceed my capital?
Yes, if your stop is very close to entry. A tight stop means a small loss per share, so the share count grows until the position value exceeds your account · and that requires leverage. The tool warns you when this happens.
