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4. Terminate - Exiting The Trade

In the 4 T’s trading system video we use an initial stop loss 1 point to the other side of the 3 day breakout that triggered the trade and trail the stop after each new 3 day isolation;

Exit on a 5 day breakout


Terminating your trade is your exit strategy and is done one of two ways. Either you are stopped out for a loss, or you exit with a profit. The loss usually occurs because the reason you entered the trade ends up being wrong, and the stop loss is created to preserve capital by keeping the loss as small as possible. The profit occurs because the trade went in the desired direction and at some point you or your system decided the trade has done its job.

The first consideration when entering a trade is the initial stop loss. If the stop loss is never triggered, the next consideration is your exit strategy, which can be a pre-determined profit target or a trailing stop. We’ll start with the first consideration.

 

 

Move on to Step 4 - Module 2 > Trading System Builder Tool Kit: Trading Rules > Terminate: Initial Stop Loss

 

  

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