How to Use This Profit/Loss Calculator
This calculator answers the most important questions before any trade: how much can I make, how much can I lose, and is the risk worth the reward.
Select Your Instrument
Choose the forex pair, commodity, or index you are trading. The calculator automatically adjusts pip values and decimal precision.
Choose Direction
Select Buy/Long if you expect price to rise, or Sell/Short if you expect it to fall. This determines which direction is profit and which is loss.
Enter Your Price Levels
- Entry Price – Where you plan to open the position
- Stop-Loss Price – Where you will exit if the trade goes against you
- Take-Profit Price – Where you will exit to lock in gains
Set Position Size
Enter your trade size in standard lots, mini lots, micro lots, or raw units. The calculator converts between these automatically.
Understanding the Results
Potential Profit
The dollar amount you gain if price reaches your take-profit level. This is the best-case outcome.
Potential Loss
The dollar amount you lose if price hits your stop-loss. This represents your risk, assuming no slippage.
Pips / Points
The distance from entry to stop-loss and take-profit, measured in pips (forex) or points (indices).
Risk:Reward Ratio
Compares potential loss to potential profit. A ratio of 1:2 means risking $1 to potentially make $2.
Break-Even Win Rate
The minimum win rate required to be profitable with this risk:reward ratio. With a 1:2 ratio, you need to win only 33.3 percent of trades.
The Math Behind the Calculator
Profit / Loss Formula
Profit or Loss = Pips × Pip Value × Position Size (standard lots)
Calculating Pips
For long positions:
- Pips to TP = (Take-Profit − Entry) ÷ Pip Size
- Pips to SL = (Entry − Stop-Loss) ÷ Pip Size
For short positions:
- Pips to TP = (Entry − Take-Profit) ÷ Pip Size
- Pips to SL = (Stop-Loss − Entry) ÷ Pip Size
Risk:Reward Formula
R:R Ratio = Pips to Take-Profit ÷ Pips to Stop-Loss
Break-Even Win Rate
Break-Even % = 1 ÷ (1 + R:R Ratio) × 100
Example Calculation
Long EUR/USD Trade
- Entry: 1.08500
- Stop-Loss: 1.08000 (50 pips below)
- Take-Profit: 1.09500 (100 pips above)
- Position: 1 standard lot
Calculations
- Pip value = $10
- Potential Profit = 100 pips × $10 = $1,000
- Potential Loss = 50 pips × $10 = $500
- Risk:Reward = 1:2
- Break-Even Win Rate = 33.3%
Result
You are risking $500 to potentially make $1,000. You only need to win 1 out of 3 similar trades to break even.
Why Risk:Reward Matters
Many traders focus on win rate alone, but profitability depends on the relationship between win rate and risk:reward.
Expected Value Formula
Expected Value = (Win Rate × Average Win) − (Loss Rate × Average Loss)
| Win Rate |
Risk:Reward |
Profitable? |
| 70% |
1:0.5 |
Yes (+$0.20 per $1 risked) |
| 50% |
1:1 |
Break-even |
| 40% |
1:2 |
Yes (+$0.20 per $1 risked) |
| 30% |
1:3 |
Yes (+$0.20 per $1 risked) |
You do not need a high win rate if your winning trades are much larger than your losses.
Setting Realistic Take-Profit Levels
Support and Resistance
Price often reacts at key levels. Set take-profit before these areas.
Average True Range (ATR)
If a pair typically moves 80 pips per day, a 200-pip target without holding overnight is unrealistic.
Time Horizon
Scalpers target smaller moves, while swing traders aim for larger multi-day moves.
Recent Price Action
Study similar setups historically to determine realistic profit potential.
Do not force risk:reward ratios. If a trade does not offer acceptable R:R with realistic levels, skip it.
Stop-Loss Placement Strategies
Technical Stop-Loss
Place stops beyond key support or resistance. If these levels break, the trade idea is invalid.
Volatility Stop-Loss
Use ATR to allow for normal price movement. A common method is SL = Entry − (1.5 × ATR).
Fixed Pip Stop-Loss
A consistent pip distance regardless of volatility. Simple, but less adaptive.
Never move your stop-loss further away. Accept the loss and review after.
Multi-Target Trade Management
Some traders use multiple take-profit targets to scale out of positions.
Example: 3-Target Approach
- TP1: 50 pips (close 1/3 position)
- TP2: 100 pips (close 1/3 position)
- TP3: 150 pips (close remaining 1/3)
Calculating Overall P&L
Total Profit = (Size1 × Pips1 × Pip Value) + (Size2 × Pips2 × Pip Value) + …
Multiple targets lock in profits early but reduce maximum gains if price trends strongly.
Related Trading Calculators
Profit and loss is the outcome – these tools (or explore all trading calculators) cover the inputs. Use them to size positions correctly, understand margin requirements, and model how consistent execution compounds over time.
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