Three exits, and when each one works

4 min read · educational content, not investment advice

Entries get the attention. Exits decide the results. There are only three basic exits, and each has a place.

1. Fixed target

A pre-defined level where you take the whole position off. Best when the move is event-driven — an earnings reaction, a scheduled print — and mean-reverting afterwards. Weakness: capping the occasional large winner that funds the year.

2. Trailing stop

You give back some of the move to stay in the ones that keep running. Best in trends. Weakness: repeated small give-backs feel worse than they cost, so people abandon it right before a big trend arrives.

3. Time stop

If the reason for the trade has not shown up in N bars, you leave. The most underused exit. Best when your thesis was "this should move now".

The professional version is usually a blend: half off at the first target, the rest on a trail, and a time stop underneath both.

Choose before you enter

Write the exit into the trade at entry — the journal has fields for it, and the review page will eventually show whether your exits or your entries are the problem.

Related reading
Put it to work
Trade journal Review page R:R