Welcome to the Trading Calculator. This tool is designed to assist you in creating a robust trading plan by considering various factors that influence the outcome of your trades. Follow the instructions to understand and make the most of each section.
Navigate the complexities of trading calculations with ease. This section offers a comprehensive guide, ensuring you make the most of our calculators.
Learn its mechanics, how to navigate it, and build strategies to safeguard your investments effectively.
Liquidation in trading occurs when the total losses on trades reach a point where you no longer have enough capital to hold the position, forcing the automatic closing of your trades by the broker. This section explains how each part of your trading plan can influence the risk of liquidation:
What it is: The balance between potential profit (reward) and potential loss (risk) in a trade.
How it Affects Liquidation: A high-risk, high-reward ratio could lead to substantial losses, bringing your capital down quickly and increasing the chance of liquidation.
What it is: The portion of your capital that is used for a single trade.
How it Affects Liquidation: A large trade size increases the amount of capital at risk. If the trade goes against you, it may result in a significant loss, bringing you closer to liquidation.
What it is: Your total available capital for trading.
How it Affects Liquidation: Lower capital means lesser room to absorb losses. A few losing trades can deplete your capital, leading to liquidation.
What it is: The expected percentage of trades you will win.
How it Affects Liquidation: An overestimated win rate can make your plan unrealistic, not accounting for potential losses that can result in liquidation.
What it is: Expected percentage gain or loss for each trade.
How it Affects Liquidation: Underestimating potential losses or overestimating gains can make you unprepared for adverse market moves, risking liquidation.
In your trading calculator, the Plan Status will show a warning if the set parameters indicate a risk of liquidation, prompting you to adjust your trading plan to manage risk better.