The two ways out of a trade
Every strategy closes positions one of two ways — and you can use both at once:Conditional exit
Close when a rule becomes true — “sell when the 9-EMA crosses below the
21-EMA.” This is the mirror of an entry rule.
Structured exit
A stop, target, trailing stop, time limit, or end-of-day close — the risk
levers covered on this page. Stack as many as you like.
Stops and targets
The two workhorses. A stop loss caps the loss on a trade; a profit target takes the win. You can express either in four units — just say which:| Unit | What you say | What it means (per contract) |
|---|---|---|
| Dollars | ”1,000 target” | A fixed dollar move against / for you |
| Ticks | ”20-tick stop, 40-tick target” | A number of price ticks |
| Points | ”15-point stop, 30-point target” | A number of full price points |
| Percent | ”1% stop, 2% target” | A percent move from the entry price |
Functional stops and targets (ATR-based)
Fixed levels don’t adapt — a 20-tick stop is huge in a quiet market and tiny in a wild one. A functional stop or target sets the distance from a series times a multiplier, measured at the moment you enter. The classic is ATR:“Set the stop at 1.5× the 14-period ATR and the target at 3× ATR, measured at
entry.” When volatility expands, your stop and target widen with it; when it
contracts, they tighten. The distance is locked in at entry.
Trailing stop
A trailing stop follows price in your favor and locks in gains: it sits a fixed distance behind the trade’s high-water mark and only ever moves toward profit, never back. Express the trail in dollars, ticks, points, or percent.“Trail the stop 4 ticks behind the high-water mark.” As price makes new highs,
the stop ratchets up 4 ticks below the best price seen. If price reverses 4
ticks off that peak, you’re out — keeping whatever ran in your favor.
Max time in trade
A time limit force-closes the position after a set duration if neither the stop nor the target has triggered — useful for ideas that should “work fast or not at all.”“Force-close the position after 30 minutes if neither stop nor target is hit.”
End-of-day close
For day-trading ideas, an end-of-day close flattens any open position at the end of the session so you carry no overnight risk. This is the default for day-trading strategies — AskFutures applies it unless you say otherwise.“Trade intraday on a VWAP cross and always close any open position at the end
of the day.”
Stacking exits — first to trigger wins
You can attach several exits to one strategy at the same time. The backtest watches all of them every bar, and whichever triggers first closes the trade. The exit reason is always recorded, so you can see why each trade ended.“Buy NQ on an opening-range breakout with a 2× ATR stop, a $750 target, a
20-tick trailing stop, and a hard end-of-day close — whichever triggers first.”
stop, target,
trailing stop, time, session close, or signal — so when you read the
backtest results you can tell at a glance how the
strategy actually got out.
Trade-frequency filters as risk control
Beyond per-trade exits, you can limit how often a strategy trades. These filters don’t change the entry logic — they thin out which signals get taken, which is a risk lever in its own right (fewer trades, less churn, lower cost drag).First trade of the day
First trade of the day
Take only the first qualifying signal each session and ignore the rest —
“take only the first EMA-cross signal each day.”
Max trades per day
Max trades per day
Cap how many positions open in a single session — “never open more than 3
trades in a day.”
Skip the first N trades
Skip the first N trades
Ignore the first N signals each day and take the ones after — “skip the first
2 opening-range signals and take the third.” Handy for sitting out the noisy
open.
Alternate direction
Alternate direction
Only take a signal if its direction is opposite the previous trade — “no two
longs in a row.” Stops a strategy from piling into one side.
Costs: every trade is net of slippage and commission
Risk management is only honest if the costs are in the numbers. AskFutures applies both on every modeled trade, so reported P&L is net of costs — not a frictionless ideal.| Cost | Default | What it models |
|---|---|---|
| Slippage | 1 tick per trade | The gap between your intended and filled price |
| Commission | 2.50/side full-size | Per-side trading fee, both entry and exit |
Next steps
Strategies
How entries, exits, filters, and parameters fit together.
Is the backtest real?
Why the same rules and data always produce the same numbers.
Backtesting
Read the results, the trade list, and the exit reasons.
Build a strategy
Describe an idea with exits and filters from scratch.