Top Exit Strategies in Day Trading

 Hello friends  lets under stand exit set up in trading 

1. Risk and Reward Ratio Strategy

This strategy is the simplest exit strategy available for day traders. Also, even beginners can use this one for a successful exit from an intraday trading session. Simply put, this one is about picking the right risk and reward ratio that could be favorable and will help your trade to be a successful one.
 

For instance, if the price of a stock is ₹10 and you expect it to rise to ₹15 but it doesn’t go above as per the trend line that you have mapped, you will need to place your stop-loss order at that point. So, for a stock price of ₹10, you can put a stop-loss at ₹9. Here, your risk to reward ratio would be 5:1. This means, for making ₹5, you will risk ₹1, which is not a very bad position to have.

2. Trailing Stop-Loss Strategy

The trailing stop loss order is the second-best exit strategy for intraday traders. This strategy aims to balance the trading risks against the profits to minimize the risks. According to its name, one part of this exit strategy is used by beginners in day trading. So, every time the trader increases their selling price, the stop-loss order is updated to cover up the risk of the investor in that particular stock.

For example, if you buy the stocks of a company at ₹100, you can place a stop-loss order at ₹99. So, when the price moves up in your favor, the selling price would be increased to the ₹101 mark as a part of the trailing stop-loss exit strategy. At this point, however, the stop-loss isn’t moved back down. For instance, if you move up to ₹105, you can place the stop-loss at ₹104; you will not reduce the stop-loss below ₹104 at any time during the trade. And similarly, this pullback on the stock price will help trigger your stop-loss order, effectively mitigating the risks.

3. Time-Based Exit Strategy

This is an exit strategy example where a part of the line of intraday trading will intraday trading be based around the major events during the trading hours. So, if traders get the news about a certain stock, they will stop all day trades of other stocks a few minutes before the news is announced. And once the news is out, the trading will be resumed.

Conclusion

Traders usually worry a lot about entering a trade at the right time during the intraday trading session. However, there should be equal efforts while identifying the right exit time as well. By keeping in mind the exit strategies mentioned above, it will be better for you to choose your trading exit points during an intraday trade session.

keep reading 

wise investing 

knowledge is growth