Exit Signals

If you use a signal to enter a trade, you are probably trying to capture a reversal. For  sample, if a currency pair has been on a short swing lately, you want to capture it as early as possible when it turns long, to accumulate as much profit as possible. This turning point is an excellent signal for entry, but would it not also be an excellent signal for exit of the short trade?  Exit signals are the most contextual way to manage profit taking. Trailing stops and limit exits rely on numeric values to determine the exit point, and have no relation to what is actually happening in the markets. Some traders love limit exits. They trade frequently and for a high percentage, but usually for low pips. An alternative view would be to use signals to manage exits. The signals can be conservative if needed, but exit signals will usually capture the “real” move better than limit exits.

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