Stop Loss & Take Profit calculator
Calculate optimal stop-loss and take-profit levels for your trades
📊 Understanding Stop Loss & Take Profit
Stop-loss and take-profit orders are essential risk management tools in trading. A stop-loss order automatically closes your position when the price moves against you by a predetermined amount, limiting your potential losses.
A take-profit order automatically closes your position when the price moves in your favor by a predetermined amount, securing your profits and preventing them from being eroded by market reversals.
🔍 How Stop Loss & Take Profit Are Calculated
The calculation considers several key factors:
- Entry Price: The price at which you entered the trade
- Risk Percentage: The percentage of your account you're willing to risk
- Lot Size: The size of your position
- Trade Direction: Whether you're long or short
- Risk-Reward Ratio: Typically 1:2 or 1:3 for optimal results
❓ Frequently Asked Questions
What is the difference between a stop-loss and a take-profit order?
A stop-loss order closes your position at a loss to limit downside risk, while a take-profit order closes your position at a profit to secure gains. Both are essential for disciplined trading.
How do I determine my risk percentage?
Most professional traders risk 1-2% of their account per trade. This means if you have a $10,000 account, you should risk no more than $100-200 per trade. This allows you to survive losing streaks.
Can I modify my stop-loss and take-profit orders after placing them?
Yes, you can usually modify these orders as long as they haven't been triggered yet. However, it's best to set them based on your initial analysis and stick to your plan to avoid emotional decision-making.
What is a good risk-reward ratio?
A good risk-reward ratio is typically 1:2 or higher, meaning you're risking $1 to potentially make $2 or more. This ensures that even with a 50% win rate, you can still be profitable over time.