Tools

How much do I risk?

The Kelly criterion answers one question: what fraction of the account belongs on this trade, given your edge? Type in your numbers — from backtests or paper trading, never from hope.

EDUCATIONAL ONLY — NOT FINANCIAL ADVICE.

This calculator does arithmetic on your numbers. It doesn't know your future, and neither do you. Paper trade first, always.

Your numbers

Account size ($)
Win rate (%) — from your log, not your gut
Average win ($) — per winning trade
Average loss ($) — per losing trade
Kelly fraction — 1.0 is full Kelly, 0.5 is half-Kelly (saner)
Typical stop distance (% of entry) — for share sizing

Your sizing

Full Kelly: –

Recommended (× your fraction): – of the account per trade

Risk per position: –

Suggested position size: –

With the 5-position cap, max concurrent risk: –

The math, in one paragraph

Kelly says: bet the fraction f* = p − q/b, where p is your win rate, q is your loss rate, and b is your average win divided by your average loss. Full Kelly maximizes long-run growth on paper — and produces drawdowns that end real accounts. That's why this calculator defaults to half-Kelly: roughly three-quarters of the growth with roughly half the pain. The position size comes from the risk dollars divided by your stop distance: risk $200 on a trade with an 8% stop means a $2,500 position.

What the numbers don't tell you

Kelly assumes your win rate and averages are true — known, stable, yours. A backtest's numbers are a rumor about the future, not a fact. The momentum system runs 233 backtested trades at 44.6% wins: promising, unproven. Until a system proves itself in paper trading, the honest Kelly fraction is zero — which is exactly where the kill switch keeps it.

Nothing here is financial advice. These are the same calculations from The Momentum Trade, chapter 3.

Nikkhah Capital — a private trading practice. Nothing here is financial advice.