1. What is Stop Loss and Take Profit?

Stop Loss (SL) and Take Profit (TP) are essential risk management tools in crypto trading. A stop loss automatically sells your position at a predetermined price to limit losses, while take profit locks in profits by selling when the price reaches your target.

2. How Does the Calculator Work?

The calculator uses these simple formulas:

Where:

• \( Entry \) — Your entry price in USD
• \( Stop\% \) — Percentage you're willing to lose (as decimal)
• \( Take\% \) — Percentage you want to gain (as decimal)

Example: If you buy Bitcoin at $50,000 with 5% stop loss and 15% take profit:

• SL = $50,000 × (1 - 0.05) = $47,500
• TP = $50,000 × (1 + 0.15) = $57,500

3. Importance of SL/TP in Crypto Trading

Details: Crypto markets are highly volatile. SL/TP helps:

• Limit emotional decision-making
• Protect your capital from large drawdowns
• Lock in profits during price spikes
• Maintain proper risk-reward ratios

4. Using the Calculator

Tips:

• Enter your entry price in USD (e.g., 0.00002341 for altcoins)
• Stop % is how much you're willing to lose (e.g., 5 for 5%)
• Take % is your profit target (e.g., 20 for 20%)
• All values must be positive numbers

5. Frequently Asked Questions (FAQ)

Q1: What's a good risk-reward ratio?
A: Many traders use 1:2 or 1:3 (e.g., 5% SL with 10-15% TP).

Q2: Should I use fixed dollar or percentage stops?
A: Percentage stops adjust with position size and are generally preferred.

Q3: How tight should my stop loss be?
A: Consider market volatility - too tight may get stopped out prematurely.

Q4: Should I move my stop loss?
A: Trailing stops can lock in profits as price moves favorably.

Q5: Do exchanges guarantee SL/TP execution?
A: No, in extreme volatility, slippage may occur.