Position size tells you exactly how many shares to buy based on your entry price, your stop loss, and how much money you are willing to lose on this specific trade.
The formula: Position size (shares) = Risk per trade / (Entry price - Stop loss price). Example: $200 risk, entry at $20, stop at $18. Risk per share = $2. Shares = 200/2 = 100 shares.
This formula ensures that if your stop loss is hit, you lose exactly your planned risk amount. Whether you buy 100 shares at $20 or 10 shares at $200, the math works out the same.
Tight stops mean more shares (and more potential profit if right). Wide stops mean fewer shares (and less loss if wrong). The entry-stop distance determines how many shares you can buy while keeping risk constant.
TuraTrade lets you set a stop price for each custom position. The dashboard shows you the cost basis and potential loss at the stop level so you can see whether the position size fits your plan.