The Forex Take Profit Generator helps traders calculate a potential take profit price from an entry price, trade direction and selected target distance. It can work with pips, points or percentage distance and can also use a risk-to-reward ratio to estimate a target.

A take profit level is commonly used to define a price at which a trader plans to close a position when the market moves in the expected direction. Calculating the target before entering a trade can help traders organize their potential entry, stop loss and reward levels.

How to Use the Forex Take Profit Generator

• Select Buy or Sell.
• Enter the currency pair.
• Enter your entry price.
• Enter the desired take profit distance.
• Select pips, points or percentage.
• Enter the appropriate pip size.
• Enter your account balance for a reward estimate.
• Enter your planned risk percentage.
• Enter your pip value per standard lot.
• Enter your planned lot size.
• Select Generate Take Profit.
• Review the generated target price and reward estimate.

How the Forex Take Profit Generator Works

For a Buy trade, the take profit is normally positioned above the entry price. For a Sell trade, the take profit is normally positioned below the entry price.

The generator converts the selected target distance into a price distance and then adds or subtracts that distance from the entry price according to the trade direction.

Forex Take Profit Formula

Example of a Forex Take Profit Calculation

Sell Trade Take Profit Example

Take Profit Using Risk-to-Reward Ratio

A risk-to-reward ratio can be used to connect the planned stop loss distance with a potential profit target. For example, if the stop loss is 50 pips and the selected ratio is 2 to 1, the corresponding target distance is 100 pips.

The risk-to-reward relationship is a planning measure. It does not guarantee that the market will reach the calculated target.

Take Profit in Pips

A pip-based target defines the distance between the entry and take profit using pips. For example, a 100 pip target on EUR/USD with a pip size of 0.0001 represents a price distance of 0.01000.

Take Profit in Points

Some trading platforms express price movement in points. This generator uses the common convention of 10 points per pip when converting points to pips. Confirm the quotation convention used by your broker or trading platform.

Percentage-Based Take Profit

A percentage-based target calculates the price distance as a percentage of the entry price. For example, a 1% target on an entry price of 1.10000 produces a price distance of 0.01100.

For a Buy trade, that distance is added to the entry. For a Sell trade, it is subtracted from the entry.

Forex Take Profit and Risk Management

A take profit level should be considered together with the stop loss and position size. The distance to the target and the position size influence the potential monetary reward of a trade.

• Define your risk before entering a trade.
• Use the actual entry price you expect to receive.
• Consider the planned stop loss distance.
• Check the pip size for the currency pair.
• Verify the pip value with your broker.
• Consider spreads and commissions.
• Consider slippage and market conditions.
• Check your broker's order and execution requirements.

Common Take Profit Calculation Mistakes

• Putting a Buy take profit below the entry price.
• Putting a Sell take profit above the entry price.
• Using the wrong pip size for a JPY pair.
• Confusing points with pips.
• Ignoring spread and trading costs.
• Using an incorrect pip value.
• Assuming a risk-to-reward ratio guarantees profitability.
• Assuming the calculated target will always be reached.

Take Profit and Position Size

The potential monetary reward depends on both the distance to the take profit and the position size. A larger position can produce a larger monetary gain or loss for the same price movement.

For example, a 100 pip target with a smaller position size can produce a different monetary reward than the same 100 pip target with a larger position size. Position sizing should therefore be considered alongside the target and stop loss.

Does a Take Profit Guarantee a Particular Profit?

No. A take profit level is a planned target and does not guarantee a particular profit. Execution conditions, spreads, slippage, gaps, liquidity and market volatility can affect the final result.

Conclusion

Frequently Asked Questions