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For Standard Stops

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The Turbo Tab is used by traders who have a standard stop loss size that they regularly use on each currency pair. It gives them their correct position size at the speed of light.

Most of the other tabs of the Advanced Calculator are designed for traders who pick a price point for their stop; the Calculator then helps you find the right position size for that price. This Turbo Tab though is different because it is for traders who already have a stop size in mind.

Why A Different Stop For Each Pair?

Experienced traders often use different stop values on different currency pairs. Why? Two main reasons:

Differing Pip Values

The first reason is because different currency pair have different pip values. Just look at the currency rates tab of the Calculator and you’ll see this at a glance.

Below we show a recent day where a pip on the GBPAUD had a value of 6.50, while the GBPCHF was 10.28.

If you were to use a 10 pip stop on both pair, you would have very different results. A 10 pip loss on the GBPAUD would cost you $65, while the 10 pip loss on the GBPCHF would cost you $102.

That doesn’t mean the GBPCHF is too expensive to trade – it just means you need to make your position sizes and your stops so your risk is the same. {This is the essence of good money management}.

Notice the PIP VALUE column in this screenshot from the Currency Rates Tab
Differing ADR

The ADR is the Average Daily Range a pair puts in – the difference between its highest value and its lowest value in a day. Here is an excerpt of a chart for a few pair:

excerpt of ADR for some forex currency pair

Imagine using the same 10 pip stop on the GBPPAUD and theAUDUSD (let’s use the 2019 ADRs as an example)…

  • 10 pips on the GBPAUD is 10/157 = 6%
  • 10 pips on the AUDUSD is 10/48 = 21%

In other words, the 10 pip stop on the AUDUSD gives you plenty of breathing room – it’s 20% of the day’s average move.

But the 10 pip stop on the GBPAUD is tight – it’s just a sliver of what it normally puts in each day.

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