How to use the risk management calculator

Why use the Risk Calculator?

The Risk Calculator is an essential tool for managing risk in your trading strategy with your PROP365 Account on TradeLocker. It allows you to set precise Stop-Loss (SL) levels and specify the dollar amount you're willing to risk, ensuring you don't overextend your trading position. By using this tool, you can minimize your potential losses, make disciplined trading decisions, and enhance your overall trading security.

The main purpose of the Risk Calculator is to balance potential rewards against potential losses, helping you:

• Protect your investments from major losses.
• Keep emotions in check during trades.
• Stick to your risk management strategy.

Step-by-step guide to using the risk calculator

Go to the risk calculator tool in the order panel.

Set the SL price on the chart

Set the SL price on the chart which is the price at which your position will be automatically closed to prevent further losses. This is a crucial step in defining your risk limit.

Evaluate what you are willing to lose

Input the maximum dollar amount you are willing to lose if the trade does not go as planned. This amount should be a reflection of your risk tolerance and trading strategy. Once you input the SL price and the dollar amount for potential loss, the order amount will get automatically calculated. This is the amount of the asset you should trade to stay within your specified risk limits.

Adjust

If you are not comfortable with the calculated order amount, you can go back and adjust the SL price or the dollar amount until you find a balance that suits your risk tolerance.

Execute trade

Now you can proceed to execute your trade.

You can also use the expanded order panel in order to calculate your risk. Here is how:

Learn More and Improve Your Trading

• Tutorial: For a more detailed guide on how to use the Risk Calculator and manage your risk effectively, check out the YouTube tutorial.
• SL & TP Calculator: Want to go deeper? Learn how to use the SL & TP calculator to further refine your risk management.