Trading Signals Explained
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Entry, target and stop explained

Three prices decide your risk before the trade is even placed. Understanding them is the difference between following a call and gambling on a direction.

The instrument tells you what; the direction tells you which way; but the three prices — entry, target and stop — are where a signal becomes a plan instead of an opinion. Together they fix, in advance, both what you stand to make and what you stand to lose.

Entry: where the plan begins

The entry is the price the call is taken at. Its job is precision. A call that says “long at 412.80” can be matched against what the market actually did; a call that says “long in this area” cannot, because almost any later price can be claimed as the entry that worked. When you read a record, a precise entry is a small but real sign of honesty — it is the sender accepting a fixed reference point they cannot move later.

Target: the planned reward

The target is where the plan takes profit. The gap between entry and target is the intended gain on the trade. A target is not a promise — the market may never reach it — but it states the upside the call is playing for, which you need in order to judge whether the trade was worth its risk.

Stop: the planned loss, and the honest field

The stop is where the plan cuts the loss. It is the single most important field on a signal, and the one a weak service is most tempted to leave out, because it is an admission made before the outcome: this is the price at which I will accept I was wrong. The gap between entry and stop is your risk. A call with no stop has not capped its downside and has not committed to being wrong anywhere, which means it can never really lose — on paper.

Putting them together: reward versus risk

The three prices only mean something in relation to each other. Measure the entry-to-target distance against the entry-to-stop distance and you have the reward-to-risk ratio — the number that decides whether a call deserves your capital. A trade risking one to make two can be wrong more often than it is right and still build a record, while a trade risking three to make one needs to be right almost every time to survive. This is why the win rate alone is misleading: without the reward-to-risk behind it, a high win rate can hide a strategy that loses big on its rare losers.

A quick illustration, with made-up numbers for teaching only: enter at 412.80, target 414.20, stop 412.10. The reward is 1.40, the risk is 0.70, so the call risks one to make two. Even at a 50 percent win rate that is a record that grows; at 67.5 percent it grows comfortably. Change nothing but remove the stop, and you have lost the ability to do this sum at all.

This is also why each call in a graded record carries its three prices and its grade together, all fixed before the outcome. The prices set the risk; the grade tells you how strongly the model backed it; and a timestamp proves none of them was touched afterwards.

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