Trading Exit Strategy (before the Take Profit level)

Trading Exit Strategy (before the Take Profit level)

Trading Exit Strategy (before the Take Profit level) 300 169 Minimalist Trading – Best Trading Indicators for TradingView

Many traders are good at entering the market, but they have trouble with their Exit Strategy.

In fact, if you don’t have a clear Trading Exit Strategy you will continue to take loss after loss.

But don’t give up!

Because learning a Profitable Exit Strategy is not difficult.

And in no time you will be able to recognize when to close any trade.

In today’s live trade on TradingView, we use our best entry and exit indicators which allow us to understand that we should close the trade before the Take Profit level.

It doesn’t happen every day that you should close a trade before it reaches the Take Profit.

However, when it happens, you’d better be prepared so that you can still make money.

Trade setup – 13 Dec 2019

Learn when to close the trade before reaching the target Setup 1

By making the technical analysis on this TradingView chart we identify a clear trading setup with our indicators. In particular:

    1. There is a significant divergence between the price, which is moving up, and the RSI Exhaustion, which is moving down
    2. The RSI Exhaustion is bullish exhausted (colored green)
    3. There is a confirmed top (displayed by the Bottoms Tops Signal)

We set the Stop Loss a bit higher than the most recent highest price level

Then we set the Take Profit all the way down to the major support displayed by the Levels and Zones.

Why do we set our Trading Target there?

Because we know that the price likes to test those support and resistance levels multiple times.

And, if we expect that the price will move lower, then it is very likely that it will go down all the way there.

Trade update – 13 Dec 2019

Learn when to close the trade before reaching the target Setup 2

The price is going down rapidly but with some volatility.

Trade update – 13 Dec 2019

Learn when to close the trade before reaching the target Setup 3

The price just kept falling and almost reached the target.

Let’s just be a bit more patient.

Trade closed – 16 Dec 2019

Learn when to close the trade before reaching the target Setup 4

We manually closed the trade because a new major support level appeared (thanks Levels and Zones!)

Essentially, our initial technical analysis has now changed.

In fact, if we still expect the price to reach our initial Trading Target, we must assume that the price has the strength to fall against two major support levels which are, instead, creating a significant upward pressure.

This trade is one of the rare situations in which we were forced to change the plan while the trade was running.

What happened is that, as we got very close to the target, a new support level appeared just before the target.

This rare situation means that the price might not ultimately reach the Take Profit level, which is the reason why we closed our trade.

This is one key rule in our exit strategy.

It’s a rational decision that we took and was justified by the significant change in the underlying technical chart.

In the end, though, we still got a 5x profit.

How does your Exit Strategy look like?

And how do you handle trades where the Trading Target becomes unlikely to be reached?

Share your tips with fellow traders by leaving a comment on the YouTube video above!