Take Profit Calculator
Use our free Take profit Calculator to plan your risk management strategy. Get detailed breakdowns, charts, and actionable insights.
Reviewed for accuracy by Daniel Agrici, Founder & Lead Developer
Take Profit Calculator
Calculator
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Formula: Take Profit Price = Entry Price ± (Stop Loss Distance × Risk-Reward Ratio)
Worked example — Take Profit: 1.09100 | Reward: 60 pips ($600) | Risk: 30 pips ($300)
Formula
Take Profit Price = Entry Price ± (Stop Loss Distance × Risk-Reward Ratio)
Calculate the stop loss distance in pips from your entry price. Multiply that distance by your desired risk-reward ratio to get the take profit distance. For buy trades, add this distance to the entry price. For sell trades, subtract it. The resulting price is your take profit level.
Worked Examples
Example 1: Buy EUR/USD with 1:2 Risk-Reward
Problem:Entry: 1.0850 | Stop Loss: 1.0820 | RR Ratio: 1:2 | Lot Size: 1 standard lot
Solution:Risk = 1.0850 - 1.0820 = 30 pips Reward = 30 × 2 = 60 pips Take Profit = 1.0850 + 0.0060 = 1.0910 Reward in dollars = 60 × $10 = $600 Risk in dollars = 30 × $10 = $300
Result:Take Profit: 1.09100 | Reward: 60 pips ($600) | Risk: 30 pips ($300)
Example 2: Sell GBP/JPY with 1:3 Risk-Reward
Problem:Entry: 188.50 | Stop Loss: 189.00 | RR Ratio: 1:3 | Lot Size: 0.5 lots
Solution:Risk = 189.00 - 188.50 = 50 pips Reward = 50 × 3 = 150 pips Take Profit = 188.50 - 1.50 = 187.00 Pip value = ~$6.68 × 0.5 = $3.34/pip Reward = 150 × $3.34 = $501
Result:Take Profit: 187.000 | Reward: 150 pips (~$501) | Risk: 50 pips (~$167)
Frequently Asked Questions
What is a take profit order in forex trading?
A take profit order is a pending order that automatically closes your trade when the price reaches a predetermined profit target. Unlike a stop loss which limits your downside, a take profit locks in gains when the market moves in your favor. For a buy trade, the take profit is placed above the entry price; for a sell trade, below it. Take profit orders are essential for disciplined trading because they remove emotional decision-making from the exit process. Without them, traders often either exit too early out of fear or hold too long out of greed, both of which damage long-term profitability.
How do I calculate take profit using risk-reward ratio?
To calculate take profit using risk-reward ratio, first measure the distance between your entry price and stop loss in pips — this is your risk. Then multiply that risk distance by your desired reward ratio to get the take profit distance. For example, if your entry is 1.0850 and stop loss is 1.0820 (30 pips risk) with a 1:2 risk-reward ratio, your take profit distance is 30 × 2 = 60 pips, placing take profit at 1.0910 for a buy trade. The risk-reward ratio determines how far your take profit should be relative to your stop loss, ensuring your winners are proportionally larger than your losers.
What is the best risk-reward ratio for forex trading?
A minimum risk-reward ratio of 1:1.5 to 1:2 is recommended by most professional traders. With a 1:2 ratio, you only need to win 34% of your trades to break even (excluding spread costs). A 1:3 ratio requires just 25% win rate to break even. However, higher ratios are not always better — a 1:5 ratio may look attractive but the price is less likely to reach that target, reducing your win rate significantly. The optimal ratio depends on your trading strategy and historical win rate. Day traders often use 1:1.5 to 1:2, while swing traders may target 1:3 to 1:5 because they hold positions longer.
Should I use a fixed take profit or trail my profits?
Both approaches have merits depending on market conditions and strategy. Fixed take profits work well in ranging markets and for scalping or day trading where price targets are clear from support and resistance levels. They guarantee you capture profit at your target level. Trailing profits work better in trending markets where you want to capture extended moves beyond your initial target. A hybrid approach is popular among professionals: take partial profits at your first target (e.g., close 50% at 1:1 ratio), move stop loss to breakeven, and trail the remaining position. This secures some profit while allowing the trade room to capture bigger moves.
How does lot size affect my take profit calculations?
Lot size does not change where you place your take profit in terms of price — that is determined by risk-reward ratio and stop loss distance. However, lot size directly affects the dollar value of your reward. With 1 standard lot on EUR/USD, a 50-pip take profit equals $500. With 0.1 lots, the same 50-pip target equals $50. With 0.01 lots (micro), it equals $5. This is why proper position sizing and take profit placement must work together. Always calculate both the pip distance and the dollar value of your take profit to ensure the trade's potential reward justifies the risk in absolute dollar terms, not just as a ratio.
References
Reviewed for accuracy by Daniel Agrici, Founder & Lead Developer · Editorial policy
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