Plan Entry and Exit: Three Prices First
Risk warning: Three neat prices cannot stop losses from happening. This is education, not financial advice or a trading signal.
Entry comes after the candle closes. Stop goes beyond your zone. Target sits before the next opposing area. Risk stays near 1%.
In Part 7 you built one four-piece setup for demo. This lesson prices it exactly. No plan leaves your journal without three written numbers, as taught in Entry and Exit Rules: Knowing When to Click.
Demo example — not a signal.
Entry after close
Entry is the price where your trade starts. It always waits for confirmation.
Think of boarding a danfo. You enter after it stops at your bus stop, not while it speeds past. An open candle is a moving bus. The close is the stop.
Place entry slightly beyond the confirming close on your side. For a support bounce, that means just above the M15 close. This small buffer skips the traders who sell the exact close price.
Never enter on promise. A wick forming, a rumour of support holding, a friend's voice note. Plans start at finished candles only.
Stop beyond zone
The stop loss is your automatic brake pedal. It exits the trade at a chosen price when the idea fails.
Place it beyond the full zone, with room for normal wicks. A stop inside the zone dies from ordinary noise. A stop exactly on the edge begs to be hunted.
The stop also draws your invalidation, the line that proves you wrong. A full H1 close past it means the market rejected your read. Accept it and close the chart.
Size backwards from the stop. Measure zone-to-entry distance first. Then choose a position size, how large your trade is, that risks near 1%. Read Position Sizing: Matching Lot Size to Your Risk.
Target before wall
The take profit is your planned exit when price moves your way. Place it before the next opposing zone, never beyond it.
Old zones have memory. Price that respected resistance twice will likely pause there a third time. Planning through that wall is planning to donate.
Then do the ratio check. Measure stop distance against target distance. Your target should stand at least as far as your stop. This is the risk-reward ratio, how much you hope to gain versus what you risk. Read Risk-Reward Ratio: Why Winning Less Can Earn More.
If the ratio falls short, skip. Do not drag the target past the wall to fake the math. A skipped trade costs nothing. A stretched target costs stops.
Price one example
EUR/USD, H1 uptrend, support zone marked from two bounces. Price pulls back. M15 prints a lower wick and closes firmly above support.
Write three prices on demo with $10:
- Set entry — just above the M15 confirming close. The close is fact, the buffer avoids the crowd.
- Set stop — below the full support zone with wick room. This is your invalidation line.
- Set target — before the next resistance zone. Check the ratio beats 1:1 before proceeding.
- Size the trade — pick a lot size that risks about $0.10 if the stop hits.
If the stop distance demands more than $0.10 at the smallest size, the setup is too dear. Walk away. Dear setups sink small accounts faster than wrong direction ever could.
Common mistakes
Entering mid-candle
Clicking while the M15 candle still has minutes left. The shape you bought can still melt. Entries belong to closed candles only.
Hiding stop inside zone
Tucking the stop within the band to shorten the distance. Normal wicks collect it by afternoon. Stops live beyond zones or they die inside them.
Aiming past resistance
Setting the target above a twice-respected ceiling because the ratio looked thin otherwise. Walls do not move for your math. Take the nearer target or skip.
Widening stop mid-trade
Price nears your stop, so you drag it lower for breathing room. A planned $0.10 loss becomes $0.40 then a margin call story. Read Stop Loss: Your Automatic Brake Pedal.
Your practice task
Use replay mode or a demo chart. Do not fund an account for this exercise.
- Pick one setup — H1 trend, pullback to area, M15 close.
- Write three prices — entry, stop, target, plus the invalidation line.
- Check the ratio — target distance must at least match stop distance.
- Size to $0.10 — choose lot size from the stop distance, not from hope.
- Log 20 plans — screenshot each before the next candle, win or loss.
Grade your pricing, not your profit. Twenty plans with honest stops teach more than one lucky target.
Read How to Use a Demo Account Before Risking Real Money and The Trading Journal.
Next in series
Three prices make a plan. The next skill is refusal: knowing which charts deserve no plan at all.
Continue with Part 9 — Skip Bad Conditions. It lists the red flags that cancel even perfect-looking setups.
Bottom line: Write entry after the close, stop beyond the zone, and target before the next wall, sized near 1%. Plans without three prices are wishes, so skip whatever fails the ratio.
Part 8 of the KoboFX Price Action Series. Previous: Part 7 — Choose a Clean Setup. Cross-links: Stop Loss, Position Sizing, Risk-Reward Ratio.
Frequently Asked Questions
Where should I place my entry in a price action setup?
Place entry after the confirming candle closes, slightly beyond its close on your side. Entering before the close means trading a plan that does not exist yet. The close is the trigger for everything else.
Where should my stop loss go?
Beyond your marked zone with room for normal wicks, never inside it or exactly on its edge. The stop marks your invalidation: the price that proves your idea wrong. Size your position so this distance risks near 1%.
Where should my take profit go?
Before the next opposing zone, not beyond it. Old zones often pause price again. If the distance to that zone is too small for your risk, skip the setup instead of stretching the target.
What risk-reward ratio should beginners use?
Aim for targets at least as far as your stop, and skip anything worse. A 1:2 ratio means one win covers two losses before costs. Read the Risk-Reward Ratio lesson and never force a ratio by widening hope.