> ## Documentation Index
> Fetch the complete documentation index at: https://docs.trinigence.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Percent vs Logic-Based Exits

> When to use fixed percent exits (TP/SL) vs indicator/logic exits - and how they interact.

## Two exit families

Most exit rules fall into two families:

1. **Percent-based exits**
   * fixed TP/SL (e.g. TP 6%, SL 1%)
   * simple, deterministic, predictable

2. **Logic-based exits**
   * indicator exits (e.g. trend flips, crosses)
   * structure exits (e.g. break of swing low)
   * time exits (e.g. close at session end)

Both are valid - and many good strategies use both.

***

## Percent-based exits (TP/SL)

Percent exits define targets relative to entry price.

Examples:

```text theme={null}
Exit long with TP 7% and SL 1%.
Exit short with TP 6% and SL 1%.
```

Strengths:

* clear risk boundaries
* easy to understand and compare
* robust across market noise (if sized correctly)

Weaknesses:

* can cut winners early in strong trends
* can fail to adapt to volatility changes
* may not match market structure

<Card title="Take profit & stop loss" icon="bullseye" href="/risk-execution/take-profit-and-stop-loss" horizontal>
  Learn TP/SL behavior and best practices.
</Card>

***

## Logic-based exits

Logic exits use conditions, not fixed percentages.

Examples:

```text theme={null}
Exit long when EMA(20) crosses below EMA(50).
Exit short when Supertrend changes to buy.
Close any open position at 23:00 UTC.
```

Strengths:

* adapts to trend continuation
* can match market structure
* can reduce unnecessary exits

Weaknesses:

* can be slower (late exit)
* can increase drawdowns if not protected
* requires careful validation

***

## Which should you choose?

A practical heuristic:

Use **percent exits** when:

* you want predictable risk
* you are testing early iterations quickly
* you trade noisy / low timeframes
* you want strict downside control

Use **logic exits** when:

* you want to let winners run in trends
* you need structure-based behavior
* you want exits aligned with regime changes
* you want strategy behavior to adapt

***

## The common best practice: combine both

Many strong strategies do this:

* **Primary exit** = logic-based (captures trend behavior)
* **Safety layer** = stop loss (prevents tail losses)
* optional TP = take profit cap (prevents overstay)

Example:

```text theme={null}
Exit long when trend flips bearish,
but enforce SL 1% and TP 6%.
```

How it behaves:

* if trend exit triggers first → exits by logic
* if SL triggers first → exits by protection
* if TP triggers first → locks profit early

<Info>
  When multiple exits exist, the earliest triggered exit closes the trade.
</Info>

***

## Timeframe sensitivity

Exit selection depends strongly on timeframe.

* lower timeframe → percent exits tend to work better (noise control)
* higher timeframe → logic exits often improve trend capture

<Warning>
  A logic exit on 5m can become a drawdown machine if not protected.
</Warning>

***

## Why your results may “not match expectations”

If you expected logic exits to control behavior but see many exits by TP/SL:

* TP/SL triggers earlier than logic exits
* TP/SL is too tight for timeframe volatility
* the strategy is not trending enough

If you expected tight risk control but see deep drawdowns:

* logic exit is too slow
* no protective SL exists
* volatility regime changed

<Card title="How to read results" icon="magnifying-glass-chart" href="/backtesting/how-to-read-results" horizontal>
  Use the correct workflow to diagnose outcomes.
</Card>

***

## Common mistakes

<AccordionGroup>
  <Accordion title="Using only TP without SL">
    High win rate illusions often collapse because one tail loss wipes the curve.
  </Accordion>

  <Accordion title="Logic exit without protection">
    Trend exits can be late. Without SL you may accumulate large drawdowns.
  </Accordion>

  <Accordion title="TP/SL too tight for the market">
    The strategy becomes a stop-out machine and never reaches logic exits.
  </Accordion>

  <Accordion title="Comparing percent and logic exits using only return">
    You must compare risk (drawdown) and stability, not just PnL.
  </Accordion>
</AccordionGroup>

***

## Best practices

* Define your exit intent: cap profit vs follow trend
* Always include a stop loss unless you have a strong reason not to
* Tune TP/SL to timeframe volatility (not preference)
* Inspect the biggest wins/losses to see which exit type dominates

***

## What to read next

<CardGroup cols={2}>
  <Card title="Exit logic" icon="arrow-right-from-bracket" href="/strategy-structure/exit-logic">
    All exit types and how to structure them.
  </Card>

  <Card title="Take profit & stop loss" icon="bullseye" href="/risk-execution/take-profit-and-stop-loss">
    Fixed percent exits explained.
  </Card>

  <Card title="Metrics explained" icon="chart-column" href="/backtesting/metrics-explained">
    See exit impact in metrics.
  </Card>

  <Card title="Common pitfalls" icon="triangle-exclamation" href="/backtesting/common-pitfalls">
    Exit mistakes that distort backtests.
  </Card>
</CardGroup>

<Note>
  Percent exits control risk.\
  Logic exits control behavior.\
  The best strategies usually need both.
</Note>