Risk Management Calculators
Protect your capital with strict position sizing and margin tracking.
Strict Risk Management Calculators for the Share Market
Table of Contents
1. The Importance of Position Sizing
The most common reason traders lose money in the Nepal Stock Exchange (NEPSE) is improper position sizing. If you risk too much of your total capital on a single hydro or finance stock, a massive 10% lower circuit can wipe out your trading account permanently.
Our Position Size Calculator enforces mathematical discipline. By defining your total capital and dictating that you will only risk a maximum of 2% of your account per trade, the tool tells you exactly how many shares (Kitta) you are allowed to buy based on where you place your stop loss.
2. Calculating Risk to Reward Ratios
A profitable trading system does not require you to win every trade; it requires a positive expectancy. Professional traders in Nepal target a minimum Risk/Reward Ratio of 1:2. This means for every Re. 1 they risk losing, they aim to make Rs. 2.
Using our Risk/Reward Calculator, you can input your entry price, your technical stop loss (often placed below a moving average), and your target price. The calculator instantly confirms if the trade meets the strict mathematical criteria required for long-term survival.
3. Avoiding Broker Margin Calls
In NEPSE, brokers provide a 4x collateral limit. This allows traders to place buy orders up to 400% of their deposited collateral limit in TMS (Trade Management System). However, if you fail to load the actual cash equivalent by the T+1 settlement timeline, the broker imposes a massive close-out fine.
Our TMS Collateral Calculator accurately models your remaining buying power based on your loaded collateral, preventing you from over-leveraging your account and stumbling into a severe margin call.
4. Frequently Asked Questions (FAQ)
How much should I risk per trade in NEPSE?
Institutional traders and mathematical models recommend risking no more than 1% to 2% of your total account capital on any single trade. This ensures that even a streak of 10 losses won't blow up your portfolio.
What is TMS Collateral in Nepal?
Collateral is a deposit you place with your broker. In the NEPSE Trade Management System (TMS), brokers generally allow you to buy shares worth up to 4 times your collateral deposit.
Does NEPSE allow Stop Loss orders?
No. The NEPSE TMS does not currently support automated Stop Loss limit orders. Therefore, you must mentally calculate your stop loss level using our tools and execute the sell order manually if the price drops.