Stop Loss & Take Profit Calculator

What is a Stop Loss?

A stop loss is a predetermined price level at which you exit a losing trade to limit your losses. It's the most fundamental risk management tool in trading, protecting your capital by automatically closing positions when the market moves against you beyond an acceptable threshold.

Combined with take profit targets, stop losses help you define your risk/reward ratio before entering any trade, removing emotion from exit decisions and enabling disciplined, systematic trading.

How to Use This Calculator

Select Long or Short position mode
Enter your planned entry price
Enter the number of shares you'll trade
Set your stop loss price (where you'll exit if wrong)
Set your target price (where you'll take profits)

The Risk/Reward Formula

Risk/Reward Formula

R:R = Potential Profit ÷ Potential Loss

Stop Loss Entry × (1 − Stop %)

Take Profit Entry × (1 + Target %)

Why Use Stop Losses?

Stop losses are essential for long-term trading success:

Protect capital from catastrophic single-trade losses
Remove emotion from exit decisions
Enable you to walk away without watching positions
Define risk/reward before entering trades
Allow consistent position sizing based on risk

Long vs. Short Positions

For long positions, your stop loss is below your entry price - you profit when prices rise. For short positions, your stop loss is above your entry price - you profit when prices fall. This calculator handles both scenarios, correctly calculating the percentage moves and dollar amounts for each direction.

Frequently Asked Questions

What is a good risk/reward ratio?

Most professional traders look for at least 1:2 risk/reward, meaning the potential profit is at least twice the potential loss. With a 1:2 ratio, you only need to win 34% of trades to break even. Many traders aim for 1:3 or higher for swing trades.

Where should I place my stop loss?

Place stops at levels where your trade thesis is invalidated - typically below support for longs or above resistance for shorts. Technical levels include swing highs/lows, moving averages, or ATR-based stops. Avoid round numbers that market makers might target.

Should I use mental or actual stop orders?

For most traders, actual stop orders are safer - they execute automatically even if you're away or emotional. Mental stops require discipline and constant monitoring. Use actual stops unless you have a specific reason (like avoiding stop hunting in illiquid markets).

What's the difference between stop loss and stop limit?

A stop loss becomes a market order when triggered, guaranteeing execution but not price. A stop limit becomes a limit order, guaranteeing price but not execution. In fast markets, stop limits may not fill. Most traders prefer stop loss orders for protection.

Should I move my stop loss after entering a trade?

Moving stops to reduce risk (trailing stops) is common and recommended. Move to breakeven after price moves in your favor, then trail behind price to lock in profits. Never move stops to increase risk - this defeats the purpose of risk management.