Position Sizer

Overview

Calculate the optimal number of shares to buy for a long stock trade based on risk management principles. Supports three sizing methods:

• Fixed Fractional: Risk a fixed percentage of account equity per trade (default: 1%)
• ATR-Based: Use Average True Range to set volatility-adjusted stop distances
• Kelly Criterion: Calculate mathematically optimal risk allocation from historical win/loss statistics

All methods apply portfolio constraints (max position %, max sector %) and output a final recommended share count with full risk breakdown. The default output is whole shares. Use --fractional only when the user's broker supports fractional shares for the security and order type.

When to Use

• User asks "how many shares should I buy?"
• User wants to calculate position size for a specific trade setup
• User mentions risk per trade, stop-loss sizing, or portfolio allocation
• User asks about Kelly Criterion or ATR-based position sizing
• User has a small account where whole-share rounding would under-deploy a defined risk budget
• User wants to check if a position fits within portfolio concentration limits

Prerequisites

• No API keys required
• Python 3.9+ with standard library only

Workflow

Step 1: Gather Trade Parameters

Collect from the user:

• Required: Account size (total equity)
• Mode A (Fixed Fractional): Entry price, stop price, risk percentage (default 1%)
• Mode B (ATR-Based): Entry price, ATR value, ATR multiplier (default 2.0x), risk percentage
• Mode C (Kelly Criterion): Win rate, average win, average loss; optionally entry and stop for share calculation
• Stop constraint: --stop must be positive and below --entry
• Optional constraints: Max position % of account, max sector %, current sector exposure
• Optional share mode: Whole shares by default, or fractional shares with --fractional --share-precision N when supported by the broker