What you will learn
- 1Understand stop-loss vs take-profit
- 2Decide your risk per trade first
- 3Find a logical stop level
- 4Measure the stop distance in pips
- 5Open the order ticket
- 6Enter the stop-loss and take-profit levels
- 7Check the risk in money before confirming
- 8Manage the exit without widening the stop
Estimated reading time: 12 minutes
Quick answer: in MetaTrader 4 or 5, press F9 (or right-click the symbol in Market Watch and choose New Order), set your lot size, then type your stop-loss and take-profit levels into the Stop Loss and Take Profit fields before you click Buy or Sell. On a buy, the stop goes below the current price and the take-profit above it; on a sell, the other way round. The steps below show where to put each level and how to size the trade so the stop costs what you planned.
A stop-loss is the single most important order you will ever place. It is the line you draw in advance that says how much a trade is allowed to cost you if you are wrong. A take-profit does the mirror job on the upside. Together they let a trade run without you staring at the screen, and they remove the emotion that destroys most accounts. This guide shows you exactly how to set both in MetaTrader 4 and MetaTrader 5, where to place them, and how to manage the exit properly.
Step 1: Understand Stop-Loss vs Take-Profit
A stop-loss (SL) is a price below your entry on a buy, or above your entry on a sell, at which the platform automatically closes the position to cap your loss. A take-profit (TP) is a price in the opposite direction that closes the trade to bank a gain. Both are attached to the order and execute automatically, so you do not need to be watching when the level is hit.
The point of both is discipline. You decide the exit prices while you are calm and objective — before the trade is live — rather than in the heat of a fast-moving market.
Step 2: Decide Your Risk Per Trade First
Do not start with the entry. Start with the money. Decide the maximum you are willing to lose on this single trade — many traders cap this at 1% of their account balance. On a 5,000 USD account, that is 50 USD. This figure anchors everything: the stop distance and the position size both have to agree with it.
A logical level is a structural one. Support, resistance and supply-demand zones covers how those levels are drawn, and candlestick anatomy covers reading the rejection that confirms them.
Step 3: Find a Logical Stop Level
Place your stop where the market would prove your idea wrong, not where it happens to keep the loss small. For a buy, that is often just below a recent swing low or support level; for a sell, just above a recent swing high or resistance. Volatility-based traders use a multiple of the Average True Range so the stop has room to breathe.
Screenshot tip: In MT4 or MT5, use the crosshair tool (click the mouse-wheel or the crosshair icon) and drag from your entry to the stop level. The platform shows the distance in pips as you drag, which you will need in the next steps.
Step 4: Measure the Stop Distance in Pips
Count the distance from your planned entry to the stop level in pips. A stop 25 pips away is a very different trade from a stop 80 pips away — not because one is safer, but because the distance decides how large your position can be while keeping your risk at the fixed amount from Step 2.
Step 5: Open the Order Ticket
Press F9, click New Order on the toolbar, or right-click the symbol in Market Watch and choose New Order. The order window opens with fields for Symbol, Volume (your lot size), Stop Loss and Take Profit. Choose a market order to trade at the current price, or a pending order to trigger at a set level.
Screenshot tip: The execution type shown in the ticket is set by your broker for each symbol — it is not something you switch in your account settings. If you cannot attach the levels when placing the trade, open the position and add them straight afterwards; our guide to [setting a stop loss in MetaTrader 5](/learn/how-to-set-a-stop-loss-in-metatrader-5) shows the order-window, chart-drag and Toolbox methods.
Step 6: Enter the Stop-Loss and Take-Profit Levels
MetaTrader 5's own help describes the Stop Loss field as taking "a price or distance in points from the price specified in order, depending on the platform settings". Check which one your ticket shows before you type: a price where a distance was expected (or the reverse) places the level somewhere you did not intend.
MT5 also checks the direction for you. For a buy, the stop must sit below the current Bid and the take-profit above it; for a sell, both are measured against the Ask — stop above, take-profit below. When either level is hit, the whole position is closed.
As a habit, aim for a take-profit at least as far from entry as the stop (a risk-to-reward of 1:1), and ideally further, such as 1:2 or 1:3. That way a modest win rate can still be profitable over many trades.
Step 7: Check the Risk in Money Before Confirming
This is the step beginners skip and regret. Multiply your stop distance in pips by the pip value for your lot size. On pairs quoted in US dollars, such as EUR/USD and GBP/USD, one pip on a standard lot is worth 10 USD, so a 25-pip stop risks 250 USD per lot. If your limit is 50 USD, your position must be 0.2 lots. On other pairs the pip value differs — the position size tutorial shows the conversion. Confirm the number matches your plan before you click Buy or Sell.
Screenshot tip: Before clicking the final Buy or Sell button, re-read the Volume field. A single extra zero — 1.0 lot instead of 0.10 — multiplies your risk tenfold. This is the most expensive typo in trading.
Step 8: Manage the Exit Without Widening the Stop
Once the trade is live, you have three legitimate moves: leave it alone, trail the stop to follow price and lock in profit, or move the stop to breakeven once the trade is comfortably in profit. What you must never do is widen the stop — moving it further away to avoid being stopped out. That single habit is behind a huge share of blown accounts, because it converts a small, planned loss into an unplanned large one.
Bringing It Together
Setting a stop-loss is not about predicting the market — it is about deciding, in advance and in cash terms, what being wrong is allowed to cost. Combine it with correct position sizing and a sensible take-profit, and you have the core of durable risk management. Practise the whole sequence on a demo account until it is automatic before you risk real capital.
Common Questions
How do I calculate stop loss and take profit?
Start from the stop: put it where the trade idea is proven wrong, measure the distance in pips, then size the position so that distance costs your chosen risk. The take-profit is then a multiple of the same distance — a 30-pip stop with a 1:2 target means a take-profit 60 pips from entry.
Does a stop-loss guarantee my exit price?
No. A standard stop becomes a market order when it is triggered, so in a fast or gapping market it can fill at a worse price. Some brokers sell guaranteed stops for a fee — see what stop orders actually guarantee.
Should I move my stop-loss once the trade is open?
Only in your favour — to breakeven or as a trailing stop. Widening a stop to avoid being closed out is the habit this guide warns against in Step 8.
Next Step
Once the order ticket is second nature, the remaining difference between accounts is the broker — its spreads, its execution and the platforms it offers. Compare brokers that offer MetaTrader 5 in our MT5 broker round-up, or side by side in the broker comparison.
Risk Disclaimer
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 65% and 82% of retail investor accounts lose money when trading CFDs with these providers. A stop-loss limits but does not guarantee your maximum loss — in fast or gapping markets, orders can fill at a worse price (slippage). This tutorial is for informational purposes only and does not constitute financial advice.
