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What exit logic is

Exit logic defines when and how a trade is closed. A trade is considered complete only when an exit condition is met. Without exit logic, a strategy cannot be executed or backtested.
Every direction (long and short) must have a valid exit.

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Types of exit logic

Exit logic can be based on different mechanisms.

Fixed exits

Take profit and stop loss defined as fixed percentages or values.

Indicator-based exits

Exits triggered by indicator conditions.

Time-based exits

Trades close after a defined duration.

Conditional exits

Exits that depend on market context or regime.

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Fixed exits (TP / SL)

The most common exit type. Example: 
Exit with a 5% take profit and a 1% stop loss.
Fixed exits are:
  • easy to reason about
  • deterministic
  • comparable across strategies
They apply symmetrically to long and short trades unless specified otherwise.

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Indicator-based exits

Indicator exits close a trade when a condition becomes true. Examples: 
Exit long when RSI(14) crosses below 50.
Exit short when EMA(20) crosses above EMA(50).
Indicator exits:
  • adapt to market behavior
  • can shorten or extend trades
  • are evaluated on candle close

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Time-based exits

Time-based exits close a trade after a certain duration. Example: 
Exit any trade after 12 hours.
These exits:
  • cap exposure time
  • prevent very long trades
  • are often combined with TP/SL

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Multiple exit conditions

A trade may have multiple exit conditions. Example: 
Exit with a 6% take profit,
or a 1.5% stop loss,
or after 24 hours.
The first exit condition met closes the trade.

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Direction-specific exits

Exit logic may differ by direction. Example: 
For long trades use a 6% TP and 1% SL.
For short trades use a 4% TP and 1.5% SL.
This allows:
  • asymmetric risk profiles
  • adaptation to market behavior

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When exits are evaluated

Exit logic is evaluated:
  • on every candle close
  • while a trade is open
  • before new entries are considered
Exit conditions always take priority over new entries.

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Default behavior

If exit logic is:
  • missing → strategy is invalid
  • partially defined → ATI requests clarification
  • clearly implied → ATI may infer conservatively

What Trinigence fills automatically

See how missing exit details are handled.

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Common mistakes

Strategies without stop loss usually produce misleading results.
Multiple exits may interact in unexpected ways.
Exits are evaluated on candle close by default.

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Best practices

  • Always define both TP and SL
  • Inspect exit timing visually
  • Use time-based exits for safety
  • Keep exits simpler than entries

Risk management

Learn how exits and risk work together.

Risk management

How losses are controlled.

Entry logic

How trades are opened.

Direction: long & short

Direction-specific exits.

Strategy overview

Return to the big picture.
Entries decide if you trade.
Exits decide how you perform.