Exit criteria
The conditions that close a trade, whether it is winning or losing.
Trading Conceptsexit rulesexit plan
Full explanation
Exit criteria cover three cases: the stop loss being hit, the take profit target being reached, and the reason for the trade disappearing before either happens.
That third case is the one most traders never define. If you entered on a breakout and price closes back inside the range, the idea has failed even though the stop is untouched.
Exits should be decided before entry. Deciding while a position is live means deciding while you are emotionally involved.
Why traders watch it
Most of the difference between traders with identical entries comes from exits. Undefined exits produce small winners and large losers.
Trading considerations
- Define an invalidation exit, not just a stop loss and a target.
- Never widen a stop to avoid an exit you already agreed to.
- Review exits separately from entries in your journal.
Educational guidance only — never a trading signal or recommendation.