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The Position Sizing Workbook
Most accounts do not die because the strategy was wrong. They die because the position was too large in the one trade where it was. This workbook does that arithmetic: how much to risk, what a losing streak costs, and how far a drawdown has to be climbed back.
Three questions it answers with your own numbers
- How many units do I buy? Enter the entry, the stop and your risk per trade. It returns the size that makes a stop-out cost exactly your budget, after fees and slippage, rounded down to a whole lot, and capped by how much capital one position may occupy.
- What does a losing streak actually cost me? A streak of five losses is an ordinary year, not a disaster. What it does to the account depends entirely on the size you chose before it started.
- How far back is the climb? Losses and gains are not symmetric. The workbook shows the gain needed to recover and the years of compounding that takes.
Losses are not symmetric
The cost of a loss grows faster than the loss itself. This is the table the workbook builds, and the reason capital preservation is arithmetic rather than temperament.
| Drawdown | Gain needed to recover | What that means in practice |
|---|---|---|
| 10% | 11.1% | A normal bad month. Recoverable without changing anything. |
| 20% | 25.0% | Where most discretionary traders abandon the system. |
| 30% | 42.9% | A 43% run is needed just to get back to level ground. |
| 50% | 100.0% | You must double what is left. Few strategies do that on demand. |
| 75% | 300.0% | Effectively terminal for most accounts. |
| 90% | 900.0% | Not a drawdown. An ending. |
The streak that halves an account
How many consecutive losses it takes to lose half the capital at each risk level, and how likely that streak is over a year of 120 trades at a 55% win rate. The workbook recalculates both from your own win rate and trade frequency.
| Risk per trade | Losses in a row to lose half | Odds of that streak in a year |
|---|---|---|
| 1% | 69 | Vanishingly small |
| 2% | 35 | Vanishingly small |
| 5% | 14 | Unlikely, but it happens |
| 10% | 7 | Expected within a few years |
| 25% | 3 | A near certainty |
Read the last two rows together. At 10% per trade, seven losses in a row halve the account, and seven in a row is not a rare event: it is expected within a few years of ordinary trading. That is the whole argument for sizing small.
Get the free edition
Four sheets: Inputs, Sizing, Drawdown and Recovery, plus a Read me. Live formulas throughout, so changing one number updates the whole file. Works in Excel, Numbers and Google Sheets.
No email required. In Google Sheets: File, Import, Upload, then Replace spreadsheet.
What is in each edition
| Sheet | What it does | Free | Full |
|---|---|---|---|
| Inputs | Equity, risk per trade, win rate, payoff ratio, costs, lot size and allocation caps. Every other sheet reads from here. | ✓ | ✓ |
| Sizing | Units to buy so a stop-out costs exactly your risk budget, after friction, lot rounding and the capital cap. Plus reward/risk and the win rate the trade needs to break even. | ✓ | ✓ |
| Drawdown & Recovery | The gain required to get back to level ground, the capital left, and the years of compounding it takes at a return you choose. | ✓ | ✓ |
| Risk of Ruin | How many losses in a row halve the account at each risk level, how likely that streak is in your trading year, and the standard risk-of-ruin figure. | – | ✓ |
| Portfolio Risk | What correlation does to several positions at once, as a grid you read your own case off. Four positions at 1% are not a 4% bet. | – | ✓ |
| Volatility Sizing | The same logic driven by ATR, so instruments with different volatility carry identical dollar risk. | – | ✓ |
| Equity Curve | The account after up to twenty consecutive losses at six risk levels, with a chart. | – | ✓ |
| Scenarios | Your current trade priced at nine risk levels, ending in the drawdown each one produces in an ordinary year. | – | ✓ |
| Trade Log | Twenty-five trades, plan against execution, R multiples, and your logged win rate next to the one you assumed. | – | ✓ |
Questions
Does it work in Google Sheets?
Yes. It uses only functions that exist in Excel, Numbers and Google Sheets, and it has no macros and no merged cells, which are the two things that usually break on import. Use File, Import, Upload, then Replace spreadsheet.
Do I need to know the formulas?
No. Blue cells are yours to edit and everything else calculates. Every sheet states the formula it uses in plain text, so you can check the arithmetic rather than trust it.
Is this investment advice?
No. It applies arithmetic to numbers you supply. It does not forecast returns, does not know your circumstances and does not tell you what to trade. AssetWhisper is not a registered investment adviser.
What if my win rate is a guess?
Then the streak and ruin numbers are a guess too, and the workbook says so on the Inputs sheet. Measure it over at least a hundred of your own trades before relying on it. The trade log in the full edition exists for exactly that.