How to read a signal

Every card in the app holds the same four things. Here is what they mean, and why the fourth one deserves more respect than it usually gets.

  1. 1

    Read the entry

    The whole setup is calculated from the entry price. Target and stop are both measured out from it, so taking the trade at a very different price quietly changes the shape of everything else. If the market has already moved past the entry, the setup is not the setup any more.

  2. 2

    Read the target

    The target is where the plan says to take profit. Across our archive it sits a median 7.5% away from the entry. That distance, known up front, is what lets you decide whether the trade is worth taking before you are emotionally in it.

  3. 3

    Read the stop

    The stop is where you cut the loss and walk away, a median 5.0% from entry. It is not a suggestion and it is not something to move once the trade is open. Traders turn a small planned loss into a large unplanned one most reliably by moving a stop.

  4. 4

    Respect the leverage

    Leverage multiplies the profit and the loss alike. At 5x a 20% move against you wipes out the whole position. Size by what you can afford to lose, not by what you hope to make.

Reward against risk

Put the two distances together and you get the reward-to-risk ratio. A median target of 7.5% against a median stop of 5.0% is a ratio of about 1.50, that much potential reward for every unit put at risk. 70.9% of the setups in our archive are framed at 1.5 or better. That ratio says nothing about whether any given trade turns out well. It says the trade was structured before it was taken.

The market never sleeps. You do.

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