Frequently asked questions
How much should I risk per trade?
Many traders risk 0.5–2% of their account on a single trade, so a run of losses doesn’t wipe them out. The position size calculator turns that percentage and your stop-loss into the number of shares, coins or units to buy.
What is a good risk-to-reward ratio?
There’s no single answer: it depends on how often your trades win. With a 1:2 ratio you only need to win about a third of your trades to break even (before fees). The risk/reward calculator shows the break-even win rate for your numbers.
How is a pip value calculated?
A pip is 0.0001 for most pairs and 0.01 for yen pairs. One standard lot is 100,000 units, so a pip is worth 10 units of the quote currency per lot. For EUR/USD that’s $10; for USD/JPY it’s ¥1,000, converted to dollars at the current rate.
Which pivot points should I use?
Classic pivots are the most widely watched. Fibonacci pivots space levels by Fibonacci ratios, Camarilla pivots sit closer to the close for range trading, and Woodie pivots give extra weight to the open. FreeCharting’s chart has a classic pivot indicator built in.
Want these on a chart? The FreeCharting chart has a long/short position tool that shows risk-to-reward as you drag, a Fibonacci tool, and a pivot point indicator.