Entry, target, and stop: the anatomy of a trade plan
Updated May 20, 2026
The three numbers that define a trade
A complete trade plan is built from three price levels. The entry is the price where you intend to open the position. The target is the price where you plan to take profit. The stop is the price where you exit at a loss because the idea hasn't worked. Decide all three before you click buy — not after the position is moving against you and emotion has taken over.
Entry: where you get in
The entry isn't just "the current price." Good entries cluster around levels that matter: a prior support zone, a moving average, a breakout above resistance, or a pullback into a trend. Picking a deliberate entry zone instead of chasing means you start the trade with a clear reference point for both your target and your stop.
Target: where you take profit
The target is your reward. It's often placed at the next meaningful level — a prior high, a round number, or a measured move from a chart pattern. Some traders scale out, selling part of the position at a first target and letting the rest run. The point is to define the reward in advance so you're not guessing when price gets there.
Stop: where you're wrong
The stop is the most important of the three because it caps the downside. It belongs just beyond the level that would invalidate your idea — below the support you bought at, or above the resistance you shorted. If hitting your stop wouldn't change your mind about the trade, it's in the wrong place. A stop you'll actually honor is worth more than a perfect entry.
How AlphaForecast presents them
Each AlphaForecast forecast frames its outlook around these same three levels so you can drop a setup straight into a plan. Distance from entry to stop is your risk; distance from entry to target is your reward — together they give you the reward-to-risk ratio that decides whether a trade is even worth taking.