Do the Entry Price, Stop Loss and Take Profit points that I am planning, actually give me the Profit at a Risk / Reward ratio I am happy with?!
Our experience in crypto led us to develop our own crypto calculator to help us when we were trading.
Having watched countless videos and read numerous ‘How to Trade’ books we realized that whilst learning there is a lot of repetition. We developed this calculator to speed up the process involved in deciding if a particular trade makes sense.
How to Get the Calculator
The Link will automatically open the spreadsheet in a Browser window but in “viewer-only ” mode. Simply go to File > Make a Copy and you can then save a version that you can then edit/use.
If you prefer you can go to File > Download and get an Excel or .CSV version but the layout and some of the images may not format correctly.
How to Use the Calculator
Sheets; (Tabs in Excel)
When you have the opened the calculator in you will see it consists of three sheets
- How to Use; This is a reference image that gives basic definitions for the calculations the sheet makes.
- Short; To be used when the trade you are checking is to be a SHORT
- Long; To be used when the trade you are checking is to be a LONG
Note: If you place data into the SHORT sheet but it is for a LONG then the numbers will not calculate correctly and vice versa.
When entering data, only add information to the cells with a white background. The other cells have been ‘protected’ to avoid accidentally changing the formulas. If you should accidentally try to enter data in a protected cell you will be prompted and should say NO.
Having entered your planned trade data all of the other cells will have the resulting calculations completed for you.
You can now assess your trade and check if fulfills the requirements for your trading strategy.
– If the trade achieved the Take Profit level you have entered, then this would be the trades reward (increase or decrease depending on LONG or SHORT) as a percentage of the coins price.
If the Coin cost $100 and your LONG T/P was $110 then your Reward % would be 10%.
– This gives you a ratio for the trade that considers the risk against the potential benefit.
- If your Stop Loss is very close to your Entry but your T/P (Take Profit) is a far away then the Risk/Reward is high.
- If your Stop Loss is far from your ENTRY but your T/P is close then the Risk/Reward is very low
This then lets you compare your planned trade with other trades where the Risk/Reward will be different.
Many traders have a minimum Risk/Reward ratio before it is not worth them making the trade as the possible benefit is not worth the risk.
See our article on Should I HODL ? | Understanding Percentage Increases to see how misleading percentages can be!