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What Is the Long/Short Tool and Who Should Use It?

The Long/Short Tool is designed to simulate a trade based on your custom entry price, stop loss (SL), and take profit (TP). This drawing tool helps you visualize a potential position, assess its risk-reward profile, and understand position sizing before placing a real order with your broker. This tool is especially useful for:
  • New traders, who want to develop risk awareness and practice setting stops and targets.
  • Experienced traders, who use chart-based planning and want quick visual feedback on trade setups.
  • Strategy testers, who want to pre-validate trades on charts using fixed or dynamic Risk/Reward (RR) levels.
You can think of it as a visual trade planner and risk simulator — it won’t place real trades, but it helps you make better ones.

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🔧 Setup: Defining Your Risk

Before drawing a trade, configure the following settings:
  • Account Size — This is your total capital used for the calculation. For example: 10,000.
  • Risk Percent — The % of your capital you are willing to risk. For example: 5%.
If you set Account Size to 10,000 and Risk Percent to 50%, you’re risking 5,000 in the simulation. The system will calculate how many lots you could buy if you risked that much at your chosen entry price.

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🟡 Entry Level

  • When you place the tool on the chart, a yellow horizontal line marks your chosen entry price.
  • A dot near the line shows the time and price of your hypothetical entry.
  • You’ll see a QTY label with two numbers:
    For example, QTY: 8/8
    • First number = remaining lots (after some were sold at partial exits, if any).
    • Second number = total lots originally bought.
This helps you track how much of the position is still open.

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🔻 Stop Loss and 🔺 Take Profit

  • The lowest level below the yellow entry line is the Stop Loss (for long trades).
  • The highest level above the entry is the Take Profit.
  • These levels are calculated automatically based on your RR setting, or can be manually adjusted.
  • If the line connecting entry to TP/SL is dashed, the trade is still open.
  • Once it hits a TP or SL level, the line becomes solid, indicating closure.

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📈 P&L and RR

  • P&L shows your current hypothetical profit or loss based on price movement.
  • RR (Risk/Reward Ratio) is calculated based on your configured RR or dynamically from your levels:
    • If you set a fixed RR of 2.0, and you risk 500, the TP will be placed at a price that gives 1,000 reward.
    • If you manually place stop and target, RR is calculated based on those placements.
This helps you immediately see if the trade is worth taking.

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🧩 Partial Targets (Optional)

You can set partial targets between your entry and final Take-Profit (TP) or Stop-Loss (SL). These are often used for scaling out of a position as the trade moves in your favor. Each target displays:
  • Absolute change in currency.
  • Percentage change from entry.
  • Change in pips.
You can also define:
  • RR target for the target.
  • What percentage of your position to close when that target is reached.
For example:
  • You set RR = 1.0 and choose to exit 50% of the position.
  • The tool places a target where your profit equals the initial risk.
  • When price hits that target, the background fills in and your quantity updates (e.g. 8/8 → 4/8).
This setup helps with layered exits, risk scaling, and more flexible trade management.

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🧠 Example Workflow

Let’s walk through a complete example using numbers.

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Step 1 — Define Capital and Risk

  • You set:
    • Account Size = 10,000
    • Risk Percent = 10% → you’re risking 1,000

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Step 2 — Draw Entry

  • You place the tool at a price of 100 (entry price for a long trade).
The system calculates:
  • Your position size = 10 lots (e.g. 1,000 / 100 per share).
  • QTY shows 10/10

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Step 3 — Set Risk/Reward

You configure:
  • Fixed RR = 2.0
  • Tool places:
    • Stop Loss at 90 (10% below entry)
    • Take Profit at 120 (20% above entry)
Now:
  • If price drops to 90 → loss of 1,000 (your full risk)
  • If price rises to 120 → gain of 2,000
  • RR = 1:2

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Step 4 — Add Intermediate Target

You add a partial TP:
  • RR = 1.0 (i.e. 110)
  • Sell 50% of the position (5 lots)
If the price hits 110:
  • Tool marks the level with a colored background.
  • QTY updates to 5/10
  • You’ve secured 500 and reduced exposure.

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✅ Tips for Best Use

  • Use the tool before entering real trades to validate your setup visually.
  • Try both fixed RR mode and manual level mode to see which fits your strategy better.
  • For complex strategies, define multiple exits to manage position actively.
  • Use it alongside your charting and analysis to stay grounded in risk.

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🧭 Final Notes

The Long/Short Tool is not a trading signal — it’s a risk visualization assistant. It won’t tell you where the market is going, but it will help you answer:
  • Is this setup worth the risk?
  • How much could I lose or gain?
  • What’s the best way to scale in or out?
For any trader trying to improve discipline and clarity in decision-making, this tool can be a vital part of the planning process.