How to use trading signals
A step-by-step guide to receiving, placing and managing a trade from a signal, from the alert to the exit. Consistent execution matters more than any single trade.
In short
- Use the same routine for every alert: receive, review, enter, manage, exit, log.
- Place the stop-loss as soon as you enter, and never move it further away.
- If you miss the entry, skip the trade rather than chase it.
- Size every position so that a loss will not hurt your account.
Not every signal wins, and losses are part of trading. Short-dated options can lose their whole value quickly. Size every position so that a loss will not hurt your account, and never risk money you cannot afford to lose.
This is what an alert contains
Every alert lists the instrument, the entry, the target and the stop-loss. The numbers below are made up.
The step-by-step process
Follow the same workflow for every signal. Consistency in execution is what separates a plan from guesswork.
Receive the signal alert
A real-time push notification arrives from the app.
- The alert includes the ticker, entry, targets and stop-loss.
- Turn on push notifications so alerts reach you in real time.
- Check it promptly: some signals have short entry windows.
Review the signal details
Read the full breakdown before acting. Never enter a trade you do not understand.
- Confirm the ticker and direction (call or put, long or short).
- Check the entry range. Do not chase if the price has already moved past it.
- Check the risk amount against your own per-trade risk rule.
- Read the analysis to understand why the trade was posted.
Place your entry
Open your own broker and place the order as specified in the signal.
- Prefer limit orders at the entry price rather than market orders.
- For options, verify the strike, expiration and call or put match the alert.
- For stocks, confirm the share quantity matches your position size.
- Set alerts or orders at your broker for the target and stop-loss.
Monitor the position and take profits
Watch the price against the targets in the alert. Where a signal has several targets, you can scale out at each one.
- Scaling out means selling part of the position at each target.
- You decide the portion that suits your plan.
- Some traders move the stop to breakeven after the first target.
Honour the stop-loss
If the stop-loss is hit before the targets, exit. No exceptions.
- The stop-loss exists to keep a bad trade from becoming a large loss.
- Never move a stop further away to give the trade more room.
- Accept the loss and wait for the next setup.
Track your results
Log every trade in a journal or spreadsheet.
- Record the date, signal, entry, exit and percent gain or loss.
- Review weekly or monthly to see what works for you.
- Use the data to improve execution and position sizing.
Managing the exit: scaling out
With several targets you can sell part of the position at each one, and keep the stop-loss in place for the rest.
Before you act on any alert
- I know the ticker and the direction (call or put, long or short).
- The price is still inside the entry range, so I am not chasing.
- The amount at risk fits my own per-trade risk rule.
- My stop-loss is set at the broker, and I will honour it.
- For options, the strike, expiration and call or put match the alert.
Turn on push notifications so each alert, with its entry, target and stop-loss, reaches you in real time.
Get the appFrequently asked questions
How fast do I need to act when I receive a signal?
It depends on the trade. Short-dated and intraday signals need quick action, while swing signals give you more time. Signals state an entry range. If you miss it, skip the trade and never chase an entry well above the recommended price.
What if I can't execute during market hours?
Focus on swing-style signals with wider entry zones that you can place with limit orders in the evening. Avoid intraday and same-day expiry trades that need active monitoring.
Should I take every signal or be selective?
Be selective while you learn and take only the ones you understand and can monitor. Quality execution on fewer trades beats poor execution on many.
What if the signal hits the stop-loss immediately?
Exit. Fast stop-outs happen and are normal, and even well-chosen trades lose. The goal is to keep each loss small and controlled. Never hold on hoping for a reversal.
Can I change the entry or exit prices from the signal?
Beginners should follow the stated levels exactly. With experience you may adjust for your own risk, but changing levels changes the risk and reward the signal was built around.
How do I know if a signal service is working for me?
Track your own results over a meaningful number of trades, including win rate and average gain against average loss. If you follow the signals closely and still lose, review your execution and position sizing first.
Get the alerts on your phone
Entry, target and stop on every alert, on iOS and Android.