Trade plans and scenarios
Markets Understood turns market activity and market information into structured trade plan concepts for Bitvavo EUR and Kraken EUR spot markets.
Entry zone, stop-loss, TP1, TP2 and TP3 are brought together in one clear scenario, making potential opportunities, risks and possible next steps visible in advance.
What's in a trade plan?
Each trade plan brings the most important levels and scenario management into one clear structure.
Entry & risk
- Entry zone Price area where the scenario becomes relevant.
- Stop-loss Level where the scenario is no longer working as expected.
- Risk / reward Potential downside considered against potential upside.
- Scenario context Why the setup is relevant within current market conditions.
- Market invalidation Market condition or level that invalidates the original setup.
Targets & protection
- TP1 First potential profit-taking level.
- TP2 Second potential target as the scenario develops.
- TP3 Extended potential target for continued movement.
- Break-even Protect the remaining position around the original entry.
- Trailing Move protection with the market when momentum continues.
How the elements work together
Markets Understood combines these elements into a structured scenario, so the setup, potential targets and risk are visible before a trade develops.
Entry zone and stop-loss
A trade plan starts with a possible entry zone: the price area where a scenario may become interesting. This does not automatically mean that the market should be entered immediately. The entry zone is considered together with the stop-loss, potential profit targets and the relationship between potential risk and potential return.
A stop-loss, often abbreviated as SL, defines a boundary for limiting potential losses when price moves in the wrong direction. If price moves beyond an important level, it can indicate that the original scenario is no longer developing as expected.
TP1, TP2 and TP3
TP1, TP2 and TP3 are potential price targets within a trade plan. They provide a structure for taking profit step by step. For example, part of a position could be closed at TP1, another part at TP2 and a final part at TP3.
A remaining portion could potentially continue while price remains strong. These targets are not guarantees; they define possible actions in advance if the market movement develops according to the scenario.
Break-even
Break-even, often abbreviated as BE, means moving the protection level to approximately the original entry price. This could be considered after an initial profit target has been reached, when part of the potential profit may already have been secured.
Whether break-even makes sense depends on the trade plan and subsequent market behaviour. It is not a fixed step that must always be taken at the same moment.
Trailing
With trailing, a protection level can move with price when the market continues in the expected direction. After TP1 or TP2, for example, protection could move upward step by step while allowing part of the position room to continue.
Markets Understood can show trailing as part of a trade plan. Execution depends on the trading platform and its available order functionality; some platforms support trailing directly, while others may require additional trading software.
No guarantee and no personal advice
A trade plan concept does not predict the market and does not guarantee returns. The information is intended as general market analysis and support, not as personalized investment advice.