Short answer
The risk budget is a chosen hypothetical loss amount. Position value is the notional amount. For an exit distance of d percent, a simplified notional equals risk budget / (d / 100).
A hypothetical example
For hypothetical capital of 1,000 units and a chosen risk fraction of 0.5%, the budget is 5 units. With a 2% distance, the calculated notional is 250 units. These illustrate the formula, not recommended settings.
What the formula omits
Fees, slippage, gaps, liquidity, contract sizes, leverage and liquidation rules can change the realized loss. An exit order does not guarantee the specified fill price. The tool does not assess whether a trade is suitable.