Glossary › exit rule
Trading glossary · psychology
exit rule
A rule you write in advance that says exactly when to close a trade, whether it is winning or losing.
The fuller meaning
A pre-defined condition for closing a trade: the stop, the target, a trailing-stop rule or a time limit. Writing exit rules while calm protects against fear cutting winners short and hope holding losers; a plan card lists setup, entry, stop, target, size and exit rules.
exit rule.
Related words
anchoring · boredom trading · chasing · cognitive bias · confirmation bias · consistency · cool-down rule · discipline · disposition effect · emotion