· 5 min read
Understanding Entry, Stop Loss and Target
Three prices define a trade. Each one answers a different question, and mixing them up is expensive.
Entry answers "at what price does this idea become worth taking?" Stop answers "at what price is the idea wrong?" Target answers "at what price has the idea done what it was supposed to do?"
Entry is a condition, not a wish
If price never reaches your entry, nothing happened and nothing was lost. An idea that expires unfilled is a normal outcome, not a failure — and it is why published ideas should include an expiry.
The stop belongs to the chart, not to your comfort
Placing a stop where the loss feels tolerable rather than where the thesis breaks produces the worst combination: you get stopped out while the idea is still valid. Size the position so that a structurally correct stop is also financially tolerable.
Targets can be partial
Taking part of the position off at a first target and letting the rest run against a moved stop is a common way to handle uncertainty. Just decide the rule before entering, not while watching the price.
Gaps do not respect stops
A stop is an instruction, not a guarantee. Overnight and weekend gaps can open past your level, and in crypto this can happen at any hour. Position size is the only real defence against that.
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How Market News Can Create Trading Opportunities
News does not move prices by itself. What moves prices is the gap between what was expected and what was reported.
How to Read a Trade Setup
Read a setup in the order that protects you: stop first, then target, then thesis.
Risk/Reward Explained
Risk/reward describes geometry, not probability. Confusing the two is the most common mistake in reading setups.