You've signed up for a signal channel, and your phone buzzes. "BTC/USDT LONG ENTRY 95000 TP 98000 SL 94000". What does it all mean? Let's break down the anatomy of a trading signal.
The Components
- Pair: The assets being traded (e.g., BTC/USDT).
- Direction: Long (Buy) or Short (Sell).
- Entry Range: The price zone where it's safe to open the trade.
- Targets (TP): Price points where you should sell portions of your position to lock in profit.
- Stop Loss (SL): The specific price where you admit you were wrong and exit to prevent further loss.
Leverage Explained
Signals often specify leverage (e.g., 10x). This means you are borrowing money to increase your position size. While it amplifies gains, it also amplifies losses. Beginners should start with 1x (spot) or very low leverage (2-3x).