Forex Stop Loss Calculator

Stop Loss Formula:

\[ SL = Entry - \left(\frac{Risk\ Amount}{Lot\ Size \times Pip\ Value}\right) \]

Entry Price:

price

Risk Amount:

currency

Lot Size:

lots

Pip Value:

currency/pip

Stop Loss (SL):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is a Stop Loss in Forex?

A stop loss (SL) is an order placed to limit potential loss on a trade. It automatically closes your position when the market moves against you by a specified amount, helping to manage risk in volatile forex markets.

2. How Does the Calculator Work?

The calculator uses the stop loss formula:

\[ SL = Entry - \left(\frac{Risk\ Amount}{Lot\ Size \times Pip\ Value}\right) \]

Where:

\( Entry \) — Entry price of the trade
\( Risk\ Amount \) — Maximum amount you're willing to lose (in your account currency)
\( Lot\ Size \) — Size of your position in lots
\( Pip\ Value \) — Value of one pip movement in your account currency

Explanation: The formula calculates how far (in price) your stop loss should be placed based on your risk tolerance and position size.

3. Importance of Proper Stop Loss Calculation

Details: Correct stop loss placement is essential for risk management. It helps preserve capital by limiting losses on individual trades while allowing for proper position sizing.

4. Using the Calculator

Tips: Enter your trade entry price, the amount you're willing to risk (in your account currency), your position size in lots, and the pip value for the currency pair you're trading.

5. Frequently Asked Questions (FAQ)

Q1: How do I determine my risk amount?
A: Risk amount is typically 1-2% of your trading account balance per trade, though this depends on your risk tolerance.

Q2: How do I find the pip value for my currency pair?
A: Pip value varies by pair and account currency. Many brokers provide pip value calculators or you can find it in your trading platform.

Q3: Should I always use this stop loss calculation?
A: While this provides a mathematically sound stop loss, you should also consider technical levels (support/resistance) when placing stops.

Q4: What's the difference between fixed and percentage stop losses?
A: This calculator provides a fixed stop loss in price terms. Percentage stops are based on percentage of account balance at risk.

Q5: How does leverage affect stop loss placement?
A: Higher leverage means smaller price movements can hit your stop loss. Always calculate position size carefully when using leverage.