How to calculate calorie needs

You aren't building muscle eating at 1200 calories. MFP didn't set you at 1200, you chose too aggressive of a goal and it gave you 1200. At very least add your exercise in and eat some of it back.

Without knowing your height and weight as well as intensity of your exercise, knowing the right calories is hard to know. If you are strength training 3 times a week, 1200 will be low. Especially if it is intense.

In regards to wanting to see results on the scale, get out of that mindset. Take body measurements instead. I mean if you didn't lose an ounce but dropped two sizes and looked better, would that not be what your intention was?

The links below should help you get a good calorie goal. As previously stated, 2 lbs/week is fine when you have a good bit to lose, but becomes unworkable as you approach goal weight. It is usually recommended to decrease weight loss goal as you approach your setpoint weight to minimize lean body mass loss and maximize fat loss. It takes longer, but the results are better.

The Basics

http://www.myfitnesspal.com/topics/show/819925-the-basics-don-t-complicate-it

http://www.myfitnesspal.com/topics/show/841305-corn-used-my-man-parts-as-a-speedbag

http://www.myfitnesspal.com/topics/show/1080242-a-guide-to-get-you-started-on-your-path-to-sexypants

Setting Your Calorie and Macro Targets

http://www.myfitnesspal.com/topics/show/819055-setting-your-calorie-and-macro-targets

http://www.myfitnesspal.com/topics/show/1058378-oh-noes-i-am-eating-below-my-bmr

http://www.myfitnesspal.com/topics/show/1072049-thoughts-on-tdee-calculators-and-switching-from-mfp-to-tdee

I've played around with both methods. Lately I've been doing TDEE-15%, but I hit a plateau for a very long time. I determined that it was either that I wasn't as active as I calculated, I was off on my food measurements and logging, I needed to lower my calories a bit more, or all of the above.

I chose all of the above. I Stopped eating out as often(as those calories can be so off), I learned the proper way to measure my food, I made sure to log even the one bite I take of just about anything, I increased my activity level and I dropped my cals (but only very little at a time. The first week I dropped it by 100 and then the next week I dropped it by 50. That's when I started to lose weight and I realized that was my "happy place"

Sometimes it's a lot of trial and error! Good luck OP and definitely do your research and play around with different approaches... as long as you are always properly fueling the body ))

1-2 pounds per week is considered a normal/healthy range but the higher end is unrealistic for those with less weight to lose.

Here is a great guideline for setting weekly weight loss goals:
If you have 75+ lbs to lose 2 lbs/week is ideal,
If you have 40-75 lbs to lose 1.5 lbs/week is ideal,
If you have 25-40 lbs to lose 1 lbs/week is ideal,
If you have 15 -25 lbs to lose 0.5 to 1.0 lbs/week is ideal, and
If you have less than 15 lbs to lose 0.5 lbs/week is ideal.

I would suggest you do some research about BMR and TDEE and use an online calculator like the one at the link below to establish a healthy calorie goal for yourself.

http://scoobysworkshop.com/calorie-calculator/

Good ADVICE ^