First confirm the types of transactions the tool can handle.
This tool is for single stock transactions involving cash purchases, denominated in individual shares. You enter your own entry price and a lower exit trigger price; it won't find prices, check market data, or place orders for you. Short selling, margin trading, futures, and options have different profit and loss and margin structures; the number of contracts cannot be directly equated with the number of shares here.
The principal should be based on the same funding benchmark used in this comparison; the custom risk cap is the percentage you use for review. The 1% in the example is just to show how the column should be used, not a risk recommendation from the website for everyone.
Following a hypothetical transaction calculation
Assuming a principal of 100,000 yuan, an entry price of 100 yuan per share, an exit trigger price of 95 yuan, and a purchase of 200 shares, with a self-defined risk limit of 1%, the price difference per share is 100 - 95 = 5 yuan. If all shares are traded at the specified price, the estimated loss is 5 × 200 = 1,000 yuan, representing 1% of the principal. The total purchase amount is 100 × 200 = 20,000 yuan.
The risk budget is 100,000 × 1% = 1,000 yuan. The allowed number of shares for the price difference is 1,000 ÷ 5 = 200 shares; the allowed number of shares for cash is 100,000 ÷ 100 = 1,000 shares. Taking the smaller one, and discarding it without further consideration, we arrive at 200 shares. This is the arithmetic upper limit under both conditions, not an order placement instruction.
Change only one condition and observe what changes.
Keeping all other conditions unchanged, if the trigger price is changed to 90 yuan: the price difference per share becomes 10 yuan, and the estimated loss for 200 shares increases to 2,000 yuan, accounting for 2% of the principal; the same 1,000 yuan budget can only accommodate 100 shares. This illustrates that when expanding the price tolerance range, it cannot be assumed that the original number of shares still meets the original budget.
Another scenario involves extremely small price spreads, resulting in a large number of shares based on risk budgets. The tool will still apply the cash cap, not considering positions exceeding the principal as buyable. The correlation between multiple transactions, used funds, and overall exposure are not aggregated in this single-transaction model.
Put the transaction and cost back into reality
The exit trigger price is not a guaranteed execution price. FINRA explains that stop-loss orders typically convert to market orders after being triggered; however, they may be executed at a lower price during periods of rapid market movement. Stop-loss limit orders restrict the price but may not be executed. Actual handling depends on market and brokerage rules.
For example, the 200 shares mentioned above were ultimately traded at 93 yuan, resulting in a price difference loss of 1,400 yuan, not including transaction fees, taxes, or other costs. This tool does not have a cost field, so the 1,000 yuan shown on the screen cannot be considered a worst-case scenario or a guarantee of profit.
Leave behind a plan that can be reviewed
Before using the strategy, write down the reasons for entering the market, the conditions for determining failure, and the exit strategy, then check the numbers. Afterwards, compare the assumed price with the actual transaction price, cost, and whether your conditions were followed to determine whether the discrepancy stemmed from calculation, execution, or the original assumption.
The case studies on this page were prepared by MOOSSin and are not from a guest account. This tool does not assess your financial situation or determine which stock to buy; a more personalized approach requires a separate assessment based on your full circumstances.