Exit System
How Turtle-style exit systems define trend endings and reduce emotional profit-taking.
The exit system determines when the trade is over. It is as important as the entry system because most trend-following profits come from staying with a move long enough.
Channel exits
A common approach is to exit when price breaks a shorter opposite channel. For a long position, this may mean exiting when price falls below a recent low. For a short position, it may mean exiting when price rises above a recent high.
Why exits give back profit
A trend-following exit waits for evidence of weakness. That means it usually exits after the best open profit has already passed. This is uncomfortable but consistent with the goal of catching large moves.
Review questions
- Was the exit rule known before entry?
- Was the exit triggered by price, or by fear?
- Was slippage recorded?
- Did the trader exit all Units according to the plan?
- Did the outcome reveal a rule issue or only normal variance?