When I first started trading, I was constantly losing money because I didn't understand how to properly set entry and exit points. Now I know it all comes down to one thing: how to calculate stop loss and take profit so that the risk is always under control.

Let's start with the most important thing. Before opening a position, you need to clearly determine how much you're willing to lose. Most experienced traders follow a simple rule: don't risk more than 1-2% of your capital on a single trade. It sounds modest, but this approach allows you to survive in the market long-term.

Now, about the calculation itself. I always look at support and resistance levels — these are the points where the price usually reverses. For a long position, I place the stop loss just below support, and the take profit just below resistance. If I open a short, the logic is reversed: stop above resistance, profit below support.

How to correctly calculate the stop loss? Here, the risk-to-reward ratio helps. The classic ratio is 1:3. In simple terms, if I risk $5, I expect a profit of at least $15. This gives me confidence that even if I’m wrong in half of my trades, I will still stay in profit.

Let me give a specific example. Suppose I enter a long at $100. Support is at $95, resistance at $110. Using a 1:3 ratio, I set the stop at $95 (risk $5) and the take profit at $115 (profit $15). For a short, the logic is similar but with opposite levels.

One thing I’ve noticed: technical indicators really help refine the levels. Moving averages show the trend direction, RSI indicates overbought or oversold conditions, and ATR helps understand volatility and set a more precise stop. I often use ATR to calculate the stop loss considering current price fluctuations.

Important point: the market is constantly changing, so you can't just set levels and forget about them. I regularly review my stops and profits depending on how the situation develops. If the trend strengthens, I might move my stop to lock in profits and protect my gains.

Ultimately, how to calculate stop loss and take profit is a matter of discipline and analysis. Use support and resistance levels, don’t forget the 1:3 ratio, and look at indicators. This doesn’t guarantee profit, but it significantly increases your chances of success in trading.