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How To Calculate Stop Loss And Take Profit Levels

Forex Investing Live Signals: How To Calculate Stop Loss And Take Profit Levels

Due to the nature of the way Forex Investing Live Signals are delivered, it is necessary for the subscriber to calculate the proper stop loss and take profit levels.  You see, signals are delivered around 5:30 PM New York time inside the member’s area.  The entry is given around a certain price level, and the stop loss and take profit levels are given as pips. 

For example, BUY @ 1.1234, stop loss 200 pips and take profit 1000 pips.

The reason you are told to BUY or SELL @ a certain level is because not everyone is taking the trade at exactly the same time as I do.  Therefore, there are going to be some slight price differences.  Due to these slight price differences, the stop loss and take profit levels are going to be slightly different as well. 

This is why each subscriber must calculate the exact stop loss and take profit price levels for themselves.

Calculating Stop Loss And Take Profit For NON-JPY Pairs

For Non-JPY pairs, the smallest increment a currency can make is 1 pip, which equals 0.0001.  Therefore, it will be the 3rd, 4th and 5th numbers in price you will be looking at.  Let’s look at some examples.

Price: 1.1234 / Stop Loss 200 pips / Take Profit 1000 pips

BUY Price: 1.1234

Stop Loss: 1.1234 – 200 = 1.1034

Take Profit: 1.1234 + 1000 = 1.2234

SELL Price: 1.1234

Stop Loss: 1.1234 +200 = 1.1434

Take Profit: 1.1234 – 1000 = 1.0234

Note: A lot of brokers show price for non-JPY pairs with 5-decimals.  For example, 1.12345.  But when calculating pips, you are not looking at the last number in price (1.12345).  The last number is a fraction of a pip.

Calculating Stop Loss And Take Profit For JPY Pairs

For JPY pairs, the smallest increment a currency can make is 1 pip, which equals 0.01.  Let’s look at some examples.

Price: 123.45 / Stop Loss 200 pips / Take Profit 1000 pips

BUY Price: 123.45

Stop Loss: 123.45 – 200 = 121.45

Take Profit: 123.45 + 1000 = 133.45

SELL Price: 123.45

Stop Loss: 123.45 +200 = 125.45

Take Profit: 123.45 – 1000 = 113.45

Note: A lot of brokers show price for JPY pairs with 3-decimals.  For example, 123.456.  But when calculating pips, you are not looking at the last number in price (123.456).  The last number is a fraction of a pip.

Trade Placement Tools

I like to avoid confusion and want to make entering trades as simple as possible.  After all, when it comes time to place the trade I don’t want to have to do any calculating that could lead to mistakes.  Therefore, I use a trade placement tool to place my trades.

I personally use Trader On Chart.  This trade placement tool not only makes it easy to enter a trade with the proper stop loss and take profit levels, but it can also calculate the correct lot size as well.

There is also a FREE tool on the MQL5 website that should do the job as well.  It is called Simple Panel EA.  I have not personally used it, but it looks like it can calculate the proper stop loss and take profit levels using pip numbers.

About the Author

Edward Lomax

Edward Lomax

Edward Lomax is a Forex blogger and educator. Originally from the East Coast of the United States, he currently lives in Chile with his wife.
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