Why do forex signals have TP1, TP2 and TP3?

Multiple targets let traders take partial profit and manage risk. Honest providers use them for management; dishonest ones count TP1 as a win even when the rest of the trade loses.

Is TP1 hit a winning trade?

Not necessarily. If price touches TP1 and then hits the stop, the whole position can still lose money. Results should be measured per whole position.

How should signal results be measured?

In R per whole position under a fixed management rule, counting every signal including losses and expired orders, then calculating expectancy after costs.

How Multiple Take Profits Hide Losses in Forex Signal Results

How signal providers use TP1, TP2 and TP3 to report high win rates while losing money, with worked examples and the right way to measure a signal service's results.

Many forex signals come with three take profit levels: TP1, TP2 and TP3. Used honestly, multiple targets are a sensible way to manage a trade. Used dishonestly, they turn a losing service into one that reports an 85 percent win rate. This is one of the most common tricks in the signal industry, and the easiest to check.

The trick

A signal is posted: buy EURUSD, stop 30 pips below, TP1 10 pips above, TP2 30 above, TP3 60 above.

Price rises 10 pips, touches TP1, then falls and hits the stop.

The channel posts: "TP1 hit ✅". The trade is counted as a win. The stop loss that followed is never mentioned.

Because TP1 is set very close to entry, it is reached often. The win rate looks spectacular. But the whole position may have lost money.

A worked example

Suppose a provider sends 10 signals, each risking 30 pips with targets at 10, 30 and 60 pips. You close one third of the position at each target and move your stop to entry after TP1.

6 signals reach TP1 and then return to entry: each earns one third of 10 pips, about 3.3 pips.
1 signal reaches TP3: one third each of 10, 30 and 60 pips, about 33 pips.
3 signals hit the stop without reaching TP1: -30 pips each, -90 in total.

Total: 6 x 3.3 + 33 - 90 = about -37 pips.

The provider reports 7 wins out of 10: a 70 percent win rate. You lost money.

Now suppose the provider does not move the stop to entry after TP1. Then the six TP1 trades that later reversed each lose two thirds of the position at the stop: one third of +10 plus two thirds of -30, about -16.7 pips each. The service still reports a 70 percent win rate. The real result is far worse.

Other variations

Counting TP1 as a full win in the monthly statistics, even when TP1 is a fraction of the stop distance.
Moving targets after the fact so more trades are "hit".
Reporting total pips from all targets combined, for example 10 + 30 + 60 = 100 pips for one trade, as if the full position had reached every target.
Leaving out signals that never triggered, while counting those that did.

How to measure a signal service properly

Measure each whole position, not each target.
Fix a management rule in advance: how much is closed at each target and whether the stop moves after TP1.
Measure in R, the result divided by the amount risked. A trade that loses the full stop is -1R. Pips alone mislead when stops vary.
Count every signal, including stops, break-evens and orders that expired.
Calculate expectancy: total R divided by number of signals. Above zero after costs is the only number that matters.

A provider with a 45 percent win rate and an average win of 2R is profitable. A provider with an 85 percent win rate and wins of 0.2R is not.

How we report it

TebotechSignals signals use three targets with one third closed at each and the stop moved to entry after TP1. Our performance page reports the result of each whole position in R under exactly that rule, including trades that came back to entry and trades that lost. You can do the same calculation for any provider.

Bottom line

"TP1 hit" is not a win. It is the start of a trade whose result is not yet known. When a provider reports win rates without R, ask for the full calculation, and if they cannot provide it, do it yourself.

For more of these techniques, read how to spot fake forex signals and our ebook Signal or Scam?.