Who this is for — Traders who set TP «to make X dollars» or force unrealistic 1:3 R:R. Target follows structure, not desire.
The target (logical take profit) is where price has highest probability to react or reverse — liquidity pools, swing highs/lows, major S/R. You do not invent it; you read it from the chart.
In plain terms — Price travels between liquidity pools. Target sits just before the next «magnet» — not beyond, where rejection is likely.
Target types
| Type | Example |
|---|---|
| Liquidity / structure | Next swing high/low, stop cluster |
| Institutional S/R | HVN, POC, weekly resistance |
| Projection | Fibo extension, 1:1 range measure |
| Dynamic | ATR multiple, VWAP band |
Target and R:R
Logical target sets potential R:R, not the other way around.
- Invalidation 10 pt, magnet at 15 pt → market offers 1:1.5 R:R
- Accept or skip — do not stretch TP artificially
Typical mistake — TP at 1:3 «by rule» while structure offers 1:1.2 → price never arrives, win rate collapses.
Example — Long from support: invalidation below swing low; target = prior swing high − 2 tick buffer (before liquidity).
Summary sheet
- Order: invalidation → target → R:R → size.
- Rule: structure > desire.
- Tool: execution take profit at level.
Silver path — Setup module. Index: Silver path.