How do you size a position in US stocks?

A $125 loss is small next to the MFC Stocks limits on $25,000. The daily pause there is $500, so it takes 4 full losses to reach it. The max drawdown is $1,250, or 10 losses in a row from the start.

The order ticket shows this for you. Enter the quantity and the stop, and it shows what you would lose if the stop hits, the daily pause room and the max drawdown room in dollars. Fit to limits sets a size that fits inside what is left. Treat that as a ceiling, not a target: your own risk per trade should usually be much smaller.

Notional is shares × price: 50 shares of a $180 stock is $9,000 of stock. Leverage on MFC Stocks is 1:2, and the ticket shows your buying power, which caps the total notional you can hold.

A very tight stop can produce a share count your buying power cannot cover. If the formula asks for more stock than you can buy, the stop is probably too tight for that price, so widen it and size down, or pick another setup.

Two more costs belong in your plan. A commission is charged on traded value on each side, so include both sides in your risk. New positions are also capped at a share of the last minute’s traded volume, so a large order in a thin stock may not fill in full. Closing is never capped.

A quick check before every order: shares × price must fit your buying power, and shares × stop must match your risk.

Place the stop where your idea is wrong, then size, never the other way round. Common choices are just beyond the prior day’s low or high, beyond a clear intraday level, or a multiple of the stock’s typical range. A stop at a level the market respects tells you something when it is hit; a stop at a round dollar amount usually does not.

Because you are flat every night, you do not need room for overnight gaps. Spreads can be wider in the first minutes after the open, though, so a stop placed right at the open may need a little more space, which means fewer shares.