Every Volensy indicator comes with a built-in Take Profit and Stop Loss system that defines your profit targets and maximum risk before you enter a trade. This system uses three progressive Take Profit levels and a fixed Stop Loss, giving you a structured approach to trade management that removes guesswork and emotion from your exit decisions. This article explains exactly how each level works, how entry prices are determined, and why this system is designed to protect your capital over the long run.

How the Multi-Level Take Profit System Works

When a Volensy indicator generates a LONG or SHORT signal, it simultaneously calculates three Take Profit levels and one Stop Loss level based on the entry price. These levels appear on your chart and in the info panel, giving you clear visual targets for managing the trade.

The Three Take Profit Levels

Each TP level is calculated as a percentage distance from the entry price:

• TP1 — 0.5% from entry — The first profit target. This is the closest level and the most likely to be hit. It allows you to secure a quick, modest profit as the trade moves in your favor.
• TP2 — 1.0% from entry — The second profit target. Reaching this level confirms that the trade has meaningful momentum. Traders often take partial profits here while letting the remainder run.
• TP3 — 1.5% from entry — The third and final profit target. This represents the full profit potential of the signal. If the trade reaches TP3, the indicator has captured a strong directional move.

Progressive Profit Taking

The three-tier system is designed for progressive profit taking. Here is how it works in practice:

For a LONG signal at an entry price of $100.00:
| Level | Calculation | Price Target |
|——-|————-|————-|
| TP1 | $100.00 + 0.5% | $100.50 |
| TP2 | $100.00 + 1.0% | $101.00 |
| TP3 | $100.00 + 1.5% | $101.50 |
| SL | $100.00 – 2.0% | $98.00 |

For a SHORT signal at an entry price of $100.00:
| Level | Calculation | Price Target |
|——-|————-|————-|
| TP1 | $100.00 – 0.5% | $99.50 |
| TP2 | $100.00 – 1.0% | $99.00 |
| TP3 | $100.00 – 1.5% | $98.50 |
| SL | $100.00 + 2.0% | $102.00 |

The key idea is that you do not need to decide in the moment where to take profits. The levels are predefined, and you can plan your exit strategy before the trade even begins.

The 2% Fixed Stop Loss

Every signal includes a 2% Stop Loss calculated from the entry price. This level defines the maximum acceptable loss for the trade:

• For LONG signals, the SL is placed 2% below the entry price.
• For SHORT signals, the SL is placed 2% above the entry price.

The 2% threshold is chosen to provide enough room for normal market fluctuations while keeping losses contained. Markets rarely move in a straight line — even a winning trade may pull back temporarily before reaching its target. The 2% buffer accommodates this natural price action without letting a losing trade run unchecked.

How Entry Price Is Determined

The entry price is the closing price of the candle that triggers the signal. When a Volensy indicator detects the conditions for a LONG or SHORT signal, it marks the signal on the current candle, and the close of that candle becomes the reference point for all TP and SL calculations.

This means:

• The entry price is always a concrete, known value — not a projected or estimated price.
• All TP and SL levels are fixed once the signal candle closes.
• The info panel immediately displays the entry price and all associated levels as soon as the signal appears.

How a Signal Plays Out: Visual Example

Here is a typical lifecycle of a LONG signal using the TP/SL system:

1. Signal generated — The indicator detects bullish conditions and places a green LONG label on the chart. The entry price is recorded at $50,000 (for example, on BTCUSDT).
2. TP and SL levels calculated — TP1 at $50,250, TP2 at $50,500, TP3 at $50,750. SL at $49,000.
3. TP1 hit — Price rises to $50,250. The first profit target is reached. A trader taking partial profits would close a portion of their position here.
4. TP2 hit — Price continues to $50,500. The second target is reached. More profits are secured.
5. TP3 hit — Price reaches $50,750. The full profit target is achieved. The trade is considered fully successful.

Alternatively, if the trade moves against the signal:

1. Signal generated — LONG at $50,000.
2. Price declines — Instead of rising, price falls toward the SL level.
3. SL hit — Price reaches $49,000 (2% below entry). The trade is closed at a loss. The maximum damage is contained to 2%.

The info panel tracks this lifecycle in real time, updating the PnL percentage as price moves relative to the entry.

Risk-Reward Analysis

The TP/SL system creates a defined risk-reward profile for every trade:

| Outcome | Profit/Loss | Risk-Reward Ratio |
|———|————-|——————-|
| SL hit | -2.0% | — |
| TP1 hit | +0.5% | 1:0.25 |
| TP2 hit | +1.0% | 1:0.5 |
| TP3 hit | +1.5% | 1:0.75 |

At first glance, the individual risk-reward ratios appear conservative. However, the system is designed for consistency over time. Indicators with success rates above 50% generate positive expected value even with TP1-only exits. When TP2 and TP3 hits are factored in, the cumulative profit potential increases substantially.

This is why the info panel displays the historical success rate — it tells you how often the indicator’s signals reach at least TP1, giving you a data-driven measure of reliability.

Why This System Protects Capital

The TP/SL framework is built on three core principles:

1. Predefined Risk

You always know your maximum loss before entering a trade. There are no surprises. A 2% stop loss means that even in a streak of consecutive losing trades, your account drawdown is controlled and predictable.

2. Progressive Profit Locking

By taking profits at multiple levels, you reduce the chance of giving back gains. A trade that hits TP1 is already a winner — even if it reverses before reaching TP2 or TP3. This progressive approach ensures that profitable trades contribute to your account even when they do not reach the full target.

3. Emotional Discipline

Perhaps the most important benefit: the system removes emotional decision-making from exits. You do not need to guess when to take profits or where to cut losses. The levels are calculated for you, and you simply follow the plan.

*See also: Indicators Overview*
*See also: Using the Info Panel*
*See also: Risk Management Essentials*