Trade setup
Rule-derived levels for a stock you have already decided to look at. Every number comes from a formula printed next to it, so you can see it is arithmetic rather than a forecast.
The levels
Entry is the last close. Nothing clever — the price you would realistically have paid at the moment you were looking.
Stop is entry minus a multiple of ATR(14), the stock's own average daily range. Using the stock's volatility rather than a round percentage means a quiet stock gets a tight stop and a wild one gets a wide one, which is the point.
Target is the average analyst price target, capped at the 52-week high. Uncapped, one stock showed a target of +124% on two analysts — a number that looks scientific and is not. If no analyst covers the stock there is no target, no risk/reward, and we do not invent one.
The three stop widths
| Setting | Stop | Trade-off |
|---|---|---|
| Wide | 3 × ATR | Hit least often, costs most when it is |
| Standard | 2 × ATR | The middle |
| Tight | 1.5 × ATR | Hit most often, costs least each time |
They are named after what changes, not after a character trait. "Defensive" is ambiguous: one reader hears limit my loss (tight) and another hears don't shake me out (wide). Neither setting is objectively safer — they trade two risks against each other.
Why the stop-hit count is there
Risk/reward improves automatically as the stop gets tighter: the denominator shrinks and the target does not move. Left alone, the most prominent number on the card would push you toward the riskiest setting.
So beside it is how many times in the past 250 trading days a fall of that depth actually happened. On one stock, tight showed 1:5.3 against wide's 1:2.6 — while that tight stop would have been hit nine times in a year against four. Without that number the card tells half the truth.
It is an approximation rather than a back-test of this exact stop: drawdowns are measured from a rolling 20-day high, and a new one is only counted once the price has recovered half the depth. The interface labels it as such.
What is deliberately missing
No position size. No amounts. No time horizon. The moment a screen says "invest $X" or "target within six months" it is unmistakably advice, and this is not that. In practice a trader resolves the stop trade-off with position sizing — the card cannot do that for you, only show the trade-off honestly.
Paper trades
A paper trade records what your decision would have done. Entries and exits fill at the last close, not a live price, so results differ from a real broker. Positions are corrected for splits and dividends. The point is an honest record of your own judgement, kept over enough time to mean something.