Stop Loss & Take Profit Calculator
Calculate exact stop loss and take profit price levels for long or short trades.
See your dollar risk, dollar reward, and risk-to-reward ratio instantly.
Why Stop Losses Are Non-Negotiable
Every professional trader uses a stop loss on every trade. A stop loss is a predefined exit point where you close a losing trade — before a small loss becomes a devastating one. The golden rule: cut losses short, let winners run. Without a stop loss, one bad trade can wipe out weeks of gains.
The Formulas
Long Trade (Buying):
- Stop Loss Price = Entry Price × (1 − Stop Loss %)
- Take Profit Price = Entry Price × (1 + Take Profit %)
Short Trade (Selling):
- Stop Loss Price = Entry Price × (1 + Stop Loss %)
- Take Profit Price = Entry Price × (1 − Take Profit %)
Dollar Risk:
- Dollar Risk = |Entry Price − Stop Loss Price| × Shares
- Dollar Reward = |Take Profit Price − Entry Price| × Shares
Risk-to-Reward Ratio:
- R:R = Take Profit % ÷ Stop Loss %
ATR-Based Stops
Many professionals set stops using the Average True Range (ATR) — a measure of how much a stock typically moves in a day. A common rule: set your stop 1.5× to 2× the ATR below entry (long) or above entry (short). This avoids getting stopped out by normal market noise.
The 1:2 Minimum R:R Rule
Most successful traders require a minimum 1:2 risk-to-reward ratio — meaning for every $1 risked, you aim to make at least $2. At 1:2, you only need to win 34% of your trades to break even. At 1:3, only 25%.
| R:R Ratio | Win Rate Needed to Break Even |
|---|---|
| 1:1 | 50% |
| 1:2 | 34% |
| 1:3 | 25% |
| 1:4 | 20% |
Trailing Stops
A trailing stop moves with the price as it goes in your favor, locking in profits. For example, a 5% trailing stop on a stock that rises from $50 to $60 would move the stop from $47.50 to $57 — protecting $7 of the $10 gain.
Worked Example
- Entry price: $50.00 (long)
- Stop loss: 2% → Stop price = $50 × (1 − 0.02) = $49.00
- Take profit: 4% → Target price = $50 × (1 + 0.04) = $52.00
- Position: 100 shares
- Dollar risk: ($50 − $49) × 100 = $100
- Dollar reward: ($52 − $50) × 100 = $200
- R:R ratio: 4% ÷ 2% = 1:2 ✓
Pro Tips
- Never move a stop loss further away from entry once a trade is open (widening losses).
- Always set your stop before entering a trade — decide your exit before your entry.
- Account for spread and commissions when calculating real break-even levels.
- Volatility matters: a 2% stop on a calm blue-chip stock is very different from a 2% stop on a volatile small-cap.