1. What is Stop Loss and Take Profit?

Stop Loss (SL) and Take Profit (TP) are essential risk management tools in trading. SL limits potential losses by automatically closing a position when the price moves against you, while TP locks in profits by closing when the price reaches a favorable level.

2. How Does the Calculator Work?

The calculator uses simple formulas:

Where:

• \( Entry \) — Your entry price for the trade
• \( Volatility \) — The amount you're willing to risk (price difference for SL)
• \( Target \) — Your desired profit level (price difference for TP)

Explanation: These calculations help traders maintain proper risk-reward ratios in their trading strategies.

3. Importance of SL and TP in Trading

Details: Proper SL and TP placement is crucial for disciplined trading. It helps manage risk, protect capital, and systematically lock in profits according to your trading plan.

4. Using the Calculator

Tips: Enter your entry price, then determine your volatility (risk) and target (reward) levels. The calculator will show where to place your SL and TP orders.

5. Frequently Asked Questions (FAQ)

Q1: What's a good risk-reward ratio?
A: Many traders aim for at least 1:2 (risk half of what you expect to gain), but this depends on your strategy and win rate.

Q2: Should I adjust SL/TP after entering a trade?
A: Generally, it's best to stick to your original plan, though some strategies allow for trailing stops to protect profits.

Q3: How do I determine the right volatility value?
A: Consider recent price movements, support/resistance levels, and never risk more than 1-2% of your account on a single trade.

Q4: Are these calculations different for crypto vs forex?
A: The principle is the same, but crypto often requires more decimal places due to smaller price units.

Q5: Should I use fixed or percentage-based SL/TP?
A: Fixed works well for this calculator, but percentage-based can be better for position sizing. Many traders use a combination.