Exit Analysis: Mastering the Art of Trade Completion

Traders obsess over entries, but exits determine your bottom line. A perfect entry with a poor exit still loses money. Exit analysis helps you understand and improve this critical skill.

Types of Exits

Planned Exits

Discretionary Exits

Forced Exits

Key Exit Metrics

Exit Efficiency: How much of the move did you capture? If a stock moved $5 and you captured $3, that's 60% efficiency.

Exit Location Analysis: Where in the move did you exit? Early, middle, or late third?

MAE/MFE Analysis: Maximum Adverse Excursion (how far the trade went against you) and Maximum Favorable Excursion (how far in your favor) reveal exit timing opportunities.

Common Exit Problems

1. Trailing Stop Too Tight You're capturing only small moves while missing big winners. Widen your trail or use time-based trails.

2. Trailing Stop Too Wide You're giving back too much profit. Consider scaling out at fixed targets while trailing a smaller portion.

3. Discretionary Exits Underperform If your "feel" exits underperform mechanical exits, trust your system more. Remove discretion.

4. All-or-Nothing Exits Scaling out (taking partial profits at different levels) often improves overall performance and psychology.

Using Practice—Process

The Exit Analysis section shows:

Review this weekly to continuously refine your exit strategy.