# Trade Echo - turning opportunities into wins

> Tailing with discipline, active verification, the 3-Box test, sizing matrix, and common errors when using platform alerts.

Source: https://tradeecho.com/docs/risk-management/trade-echo-alerts-playbooks (updated 2026-03-22)

Two practical playbooks plus sizing rules you can use with Trade Echo alerts today.

## What we are doing here

- Apply **portfolio sizing + risk rules** to real Trade Echo alerts.
- Two approaches: **(A) Tailing with discipline**, **(B) Active verification**.
- Avoid common errors: chasing, blind copying, and emotion-driven sizing.

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## Playbook A - Tail with discipline (limited screen time)

Stick to 1-2 (maybe 3) proven traders. Study their patterns, then follow a ruleset.

- [ ] Pick 1-3 traders with consistent results that fit my style/timeframe.
- [ ] Review 20-30 of their past alerts (wins/losses) and tag patterns.
- [ ] Write rules for when I will tail and when I will skip.
- [ ] Use **my own** stops and targets unless I explicitly trust their risk plan.

### Trader watchlist builder

| Trader | Strengths (setups/assets) | Weaknesses/pitfalls | Expectancy / win% | TAIL when… | SKIP when… | Notes |
|--------|---------------------------|---------------------|-------------------|------------|------------|-------|
| | | | | | | |

### Pattern study worksheet (per trader)

| Date | Setup type | Catalyst (Y/N) | Outcome (R) | Why it worked/failed | Keep or toss pattern |
|------|------------|---------------|-------------|----------------------|------------------------|
| | | | | | |

### Tailing rules (fill these in)

- [ ] I tail only these setup types: ________________________________
- [ ] I require at least one of: (a) catalyst, (b) level confluence, (c) flow confirmation.
- [ ] If the entry is gone (chasing), I skip and set an alert for the retest.
- [ ] I place **MY** stop at invalidation (_____% or level _____) and define targets (≈2-3R).

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## Playbook B - Active verification (able to monitor)

Scan alerts. Verify with a **3-box test**. Size by conviction. Execute your script.

### The 3-Box alert test

| Test | Question | Pass (✓) / Fail (✗) |
|------|----------|----------------------|
| Catalyst | Is there a clear catalyst (news, data, flow, level/time)? | |
| Analysis | Do I agree with the thesis after a quick review? | |
| Chart | Is the setup clean (trend, level, risk:reward ≥ 2R)? | |

**Score it:** each ✓ = 1 point (0-3). Use the sizing matrix below.

### Sizing matrix (align with your risk plan)

Example account: **$10k** - scale dollars to your account.

| 3-Box score | Position size ($10k example) | Stop (pos %) | Notes |
|-------------|------------------------------|--------------|-------|
| 0 | $0 - PASS | - | No edge today. Save bullets. |
| 1 | $250 (≈2.5%) | 5-10% | Probe only; quick invalidation. |
| 2 | $500 (≈5%) | 5-15% | Decent; partial take-profit at 2R. |
| 3 | $750-$1,000 (7.5-10%) | 5-25% | A-setup; manage per script, target 2-3R. |

### Execution checklist (use every alert)

- [ ] 3-Box Test score: ____/3
- [ ] Size selected: $_____ (or _____% of portfolio)
- [ ] Stop at: _____% / Level: _____ • TP1: _____ (≈2R) • TP2: _____ (≈3R)
- [ ] Time-based exit if not moving by: _____ (e.g., 15-30 min / candle close)
- [ ] Log reason + emotion score (≤2/5 to enter)

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## Common errors to avoid

- **Blind copying** size/stop - always fit risk to **your** plan.
- **Chasing** after the entry is gone - wait for your level/retest.
- **Moving stops further away** - invalidation is invalidation.
- **Overtrading** everything in the feed - quality over quantity.
- **Ignoring** your daily loss cap or the two-losses-stop rule.

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## Integrate with risk and script (recap)

- [ ] Core size: $750-$1,000 (7.5-10%); Risk shots: $250-$500 (2.5-5%).
- [ ] Stops: 5-10% (tight) or 15-25% (loose) **on the position** (not the portfolio).
- [ ] Targets: aim 2-3R; trim into strength; no hope trades.
- [ ] Guardrails: after two big losses or over daily cap, I am done.

### Decision flow (fast path)

1. Alert fires → Run 3-Box Test (Catalyst / Agree / Chart).
2. Score 0 → Pass. Score 1 → Probe size. Score 2-3 → Core sizing.
3. Preload stop and targets, then place the order with discipline.

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Back to [Risk management overview](https://tradeecho.com/docs/risk-management/overview).