Position Size & Stop Loss | QuantEdgeB

Position Size & Stop Loss | QuantEdgeB

QuantEdgeB indicator for calculating risk-based position sizing, leverage, and dynamic stop-loss levels—all in one on-chart dashboard.

🔍 What It Does
1. Position Sizing
o Takes your Portfolio Value and Risk Percentage to compute how much dollar risk you’re willing to take.
o Given an Entry Price and Stop-Loss Price, it derives the per-trade risk and thus the optimal Position Size (number of contracts/shares).
o Based on your available Margin, it calculates the implied Leverage.

2. Stop-Loss Levels
o Offers two modes:
 High-Low SL — plots the highest high and lowest low over user-defined lookback windows.
 Market-Structure SL — dynamically tracks the current up/down “wick” extremes using an HMA-driven regime filter and places your stop just inside the recent high/low wicks.
o Always overlays both a “Highest Band” and “Lowest Band” as steplines, plus a simple moving average for trend context.

3. Dashboard Table
o Presents all core inputs and outputs in a neat on-chart table:
 Portfolio Value, Margin, Risk %, Entry, Stop Loss
 Computed Position Size and Leverage
 Final Long SL and Short SL levels (depending on your chosen SL type)
o Fully customizable: choose table position, text size, color theme, and transparency.

⚙️ Inputs & Settings
Portfolio Value ($) -> Total account equity.
Margin on Exchange ($) -> Available margin for this trade.
Risk Percentage (%) -> Percent of portfolio to risk per trade.
Entry Price -> Your intended entry level.
Stop Loss Price -> Your intended stop level.
Decimal Places -> Rounding precision for “Position Size.”

Below the hood, “Position Size” is simply the number of units you should buy (or sell) so that, if your stop-loss is hit, you lose exactly your pre-defined risk amount. Here’s how to translate it into a real trade—and a quick example using the script’s default settings:

🔢 What “Position Size” Means - Deep Dive
• Units: the raw number of shares, contracts, or cryptocurrency coins.
• Risk per unit = |Entry Price – Stop-Loss Price|
• Total Risk = Portfolio Value × (Risk %)
• Position Size = Total Risk ÷ Risk per unit
If you trade instruments that are fractional (e.g. BTC) you’ll buy that many coins; if it’s a futures contract, you buy that many contracts; if it’s stock, that many shares.

🧮 Hypothetical Example
1. Inputs
o Portfolio Value = $100 000
o Risk % = 1%
o Entry Price = 105 000
o Stop-Loss Price = 104 000
o Margin Available = $10 000

2. Compute Your Risk Budget
3. Total Risk = 100 000 × (1 / 100) = $1 000
4. Compute Risk Per Unit
5. Risk per Unit = |105 000 – 104 000| = $1 000 per unit
6. Compute Position Size

7. Position Size = 1 000 ÷ 1 000 = 1 unit
o If you’re trading 1 BTC contract, you buy 1 contract.
o If it were stock, you’d buy 1 share.
o If it were spot BTC, you’d buy 1 BTC.

8. Compute Implied Leverage
9. Notional Exposure = Position Size × Entry Price = 1 × 105 000 = $105 000
10. Leverage = 105 000 ÷ 10 000 ≈ 10.5×

11. Place the Trade
o Buy 1 unit at 105 000.
o Place your stop-loss at 104 000.
o If price drifts down to 104 000, you lose exactly $1 000 (1% of your $100 000 account).

📋 Putting It All Together on the Chart
When the indicator’s table shows:
1. Portfolio Value = 100'000
2. Margin = 10'000
3. Risk% = 1%
4. Entry = 105'000
5. Stop Loss = 104'000
6. Size = 1
7. Leverage = 10.5x

…that tells you in plain terms:
“With $100 000 behind me and a 1% risk threshold, buying 1 unit here—with my stop at 104 000—means I stand to lose $1 000 if I’m wrong. I’m using $10 000 of margin, so I’m at roughly 10.5× leverage.”

No more guesswork around lot sizes or margin calls—this table gives you the exact numbers you need to place that order.

🎨 Visual Output
1. Stepline Plots
o Highest Band (short-side stop) in your down-color.
o Lowest Band (long-side stop) in your up-color.
o EMA Trend Line for context.
2. Dashboard Table
o Header with the indicator name.
o First section: all your Position Size inputs & results.
o Separator line + SL-Type label.
o Final section: Long SL and Short SL values under the chosen mode.
o Color and transparency reflect your selected theme.

🧑‍💼 Why It’s Useful
• Risk-First Sizing: Never guess your position again—risk is dollar-accurately defined.
• Flexible Stop-Loss: Choose the simple bar-high/low bands or an adaptive “wick-insider” based on market structure.
• On-Chart Clarity: Everything you need to size, stop-loss, and monitor your trade sits in one unified panel.
• Customizable: Color themes, font sizes, SL methods, and more—tailor it to your workflow.

Use this indicator to keep your risk parameters crystal-clear, automate your position sizing, and visualize both static and dynamic stop-loss levels—all without leaving your TradingView chart.