Attaching a stop loss and take profit to a signal

Every signal can carry its own stop loss and take profit, and there's more than one way to express both.

Absolute price

The most literal option: specify the exact price you want the stop or target to sit at. Precise, but it means recalculating the value every time you adjust the strategy for a different entry price.

Percentage from entry

A stop or target expressed as a percentage away from wherever the position actually fills. This is usually the more maintainable option, since it scales automatically with price — a 5% stop is a 5% stop whether the entry was $50 or $500.

Where futures traders get caught out

On futures, a percentage or point-based target is measured against the underlying ticker, not against your account's profit and loss. A 1% move on the ticker translates into very different dollar P&L depending on the contract's point value and how many contracts you're holding — worth calculating in dollars before you rely on a percentage figure for futures risk.

Trailing stops

A trailing stop follows price by a fixed distance and only ever moves in your favor, locking in more of a winning move without you manually adjusting it. It belongs in the stop-loss configuration of an order, not the entry type — the entry is still a market or limit order; the trailing behavior applies to the exit that protects it.

Moving a stop to breakeven

There's no "modify" operation for a stop that's already resting at the broker — to move it, you cancel the existing stop and send a new one at the updated price. It's two steps rather than one, but it's a reliable pattern once you know to expect it.