What a signal is and isn't: TP/SL, probability and track record

A Telegram message arrives: "AAPL — signal". What does it mean: should you buy, how much, when to exit? And most importantly — how far can you trust these signals? Let's go through it in order.

What a signal is

A signal is a notification the scanner sends when it sees a predefined rule being met. For example: "price broke through a key level on rising volume". The rule is applied the same way every time, without emotion.

What a signal is not:

• not a guarantee — it shows a probability, not an outcome;
• not personal advice — it doesn't know your capital, goals or risk tolerance;
• not an order to bet everything — you decide the position size.

Signals are only issued on stocks that passed halal screening — "doubtful" and "undetermined" stocks are not in the universe.

What a signal contains

A signal usually has three levels:

• Entry — the price at which the rule was met.
• TP (take profit) — the profit target. Sometimes several: TP1, TP2.
• SL (stop loss) — the exit level if the idea turns out wrong.

TP and SL are tools for defining risk in advance, not predictions. They answer, before you enter, "when do I take profit and when do I admit I was wrong?"

A trade without an SL is a trade without a plan. Not accepting a small loss in time often turns it into a big one.

How to judge results

You can't judge a signal service on one or two trades — you need statistics over hundreds of signals. Our track record page shows every signal, losers included. The key metrics:

1. Win rate = wins ÷ (wins + losses). Breakeven and still-open signals are excluded.
2. Average result — the mean percentage across all closed signals. This matters more than win rate: a 90% win rate can still average negative if wins are small and losses are large.
3. Profit factor = sum of winning percentages ÷ sum of losing percentages. Above 1 means the system is net positive.
4. Breakeven — a signal that stayed within ±0.5% for 7 days: neither a win nor a loss.

These numbers are computed at the signal level: equal weight per signal, no commissions. Your real result will differ depending on position size, fees and which signals you took.

Common mistakes

• Remembering only the winners. One signal made +15% — but the five before it may each have been −3%. Look at the statistics.
• Moving the SL. Lowering your stop as price approaches it ("I'll wait a bit") defeats the whole point of the rule.
• Entering late. If the price is already near TP hours after the signal, the risk/reward is completely different. Do the maths before entering.
• Trusting extended-hours moves. Sharp pre-market prices are often bogus: Why most pre-market stops are false.

Bottom line

A signal is information that helps you decide, not the decision itself. To use it well:

• know your TP and SL before every trade;
• risk only a small part of your capital on any single trade;
• judge results on long-run statistics, not one trade — track record.

Signals are on halal stocks only: halal stocks list.

This article is for information only, not investment advice. Past results do not guarantee future results.