What is a Profit Target Planner?
A profit target planner is a trading tool that helps you systematically determine exit price levels for taking profits. Instead of guessing where to exit, it calculates logical targets based on your entry point and risk (stop loss distance).
Professional traders use fixed risk-reward ratios to set targets. For example, if you're risking 100 points on a trade, a 1:2 R:R means your target should be 200 points from entry.
💡 The Key Formula
Profit Target = Entry + (Risk × R:R Multiplier)
Where Risk = |Entry - Stop Loss| and R:R Multiplier is your desired ratio (1, 2, 3, etc.)
How to Use the Profit Target Planner
Step-by-Step Example (Long Trade):
- Entry Price: ₹25,000
- Stop Loss: ₹24,500 (500 points risk)
- Target 1 (1:1): ₹25,000 + 500 = ₹25,500
- Target 2 (1:2): ₹25,000 + 1,000 = ₹26,000
- Target 3 (1:3): ₹25,000 + 1,500 = ₹26,500
Why Multiple Profit Targets?
✅ Lock In Profits
By taking partial profits at TP1, you secure gains even if the trade reverses before hitting TP2 or TP3.
✅ Let Winners Run
Keeping a portion open for higher targets maximizes profit on strong market moves.
✅ Reduce Stress
Predetermined targets remove emotional decision-making. You know exactly where to exit before entering.
✅ Improve Win Rate
Moving stop loss to breakeven after TP1 creates "free trades" where you can only win or break even.
Profit Target Strategies for Different Trading Styles
Scalping
Use 1:1 to 1:1.5 targets. Quick exits, high win rate required. Book full position at first target.
Day Trading
Use 1:2 to 1:3 targets. Book 50% at TP1, 30% at TP2, trail remaining 20% to TP3.
Swing Trading
Use 1:3 to 1:5 targets. Larger moves over days/weeks. Trail stop after each target is hit.
Common Mistakes When Setting Targets
Ignoring Support/Resistance
Your calculated target might hit a major resistance level. Always cross-check with chart structure.
Moving Targets During Trade
Greed makes traders extend targets. Stick to your plan unless there's a clear technical reason.
Using Same Targets for All Markets
Volatile assets (crypto) need wider targets than stable ones (forex majors). Adjust for ATR.
Frequently Asked Questions
What risk-reward ratio should I use?
Most professional traders use minimum 1:2 R:R. This means for every ₹1 risked, you aim to make ₹2. Higher ratios (1:3, 1:4) are better but may have lower hit rates.
Should I always wait for target 3?
No! Use multiple exits. A common strategy is: 50% at TP1, 30% at TP2, trail 20% to TP3. This locks in profits while allowing some position to ride bigger moves.
How do I combine this with other tools?
Use our Position Size Calculator to determine lot size based on your stop loss, then use this tool to set targets. Check targets against Fibonacci levels for confluence.
Does this work for short trades?
Yes! Select "Short (Sell)" in the dropdown. For short trades, targets are calculated below your entry price, and stop loss should be above entry.