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

# Risk and trade management

> Stops, targets, trailing, time and end-of-day exits, frequency filters, and the costs applied to every trade.

Once a strategy is *in* a trade, **how it gets out** is what shapes the results.
AskFutures lets you attach structured exits — stops, targets, trailing stops, a
time limit, an end-of-day flat — and frequency filters that thin out trades. You
describe them in plain English; AskFutures writes them into the strategy and the
[deterministic backtest](/concepts/is-the-backtest-real) enforces them exactly.

<Warning>
  **Exits are per-contract dollar levers, not position sizing.** A "$400 stop"
      means a **$400-per-contract adverse move\*\* — it does *not* size your position
  to risk \$400 total. AskFutures has no automatic position sizing; every dollar,
  tick, point, or percent level is measured per contract, per trade.
</Warning>

## The two ways out of a trade

Every strategy closes positions one of two ways — and you can use both at once:

<CardGroup cols={2}>
  <Card title="Conditional exit" icon="code-branch">
    Close when a rule becomes true — *"sell when the 9-EMA crosses below the
    21-EMA."* This is the mirror of an entry rule.
  </Card>

  <Card title="Structured exit" icon="shield-halved">
    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.
  </Card>
</CardGroup>

## 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** | "$500 stop, $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   |

<Tip>
  Pick whichever unit is natural for the idea. Ticks and points are great for
  intraday index and energy ideas; percent travels well across markets at
  different price levels; dollars make the per-contract risk explicit.
</Tip>

## 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:

<Note>
  *"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.
</Note>

It doesn't have to be ATR — any series AskFutures can build (standard deviation,
true range, a band width) can drive a functional stop or target. See
[signals, indicators & series](/concepts/signals-indicators-series) for what's
available.

## 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.

```mermaid theme={null}
flowchart LR
  E["Enter long"] --> H["Price rises<br/>high-water mark moves up"]
  H --> T["Trailing stop<br/>follows 4 units behind"]
  T --> X["Price pulls back<br/>to the stop → exit"]
```

<Note>
  *"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.
</Note>

## 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."

<Note>
  *"Force-close the position after 30 minutes if neither stop nor target is hit."*
</Note>

## 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.

<Note>
  *"Trade intraday on a VWAP cross and always close any open position at the end
  of the day."*
</Note>

## 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.

<Note>
  *"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."*
</Note>

Each closed trade carries an explicit exit reason — `stop`, `target`,
`trailing_stop`, `time`, `session_close`, or `signal` — so when you read the
[backtest](/concepts/backtesting) 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).

<AccordionGroup>
  <Accordion title="First trade of the day" icon="1">
    Take only the first qualifying signal each session and ignore the rest —
    *"take only the first EMA-cross signal each day."*
  </Accordion>

  <Accordion title="Max trades per day" icon="gauge-high">
    Cap how many positions open in a single session — *"never open more than 3
    trades in a day."*
  </Accordion>

  <Accordion title="Skip the first N trades" icon="forward">
    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.
  </Accordion>

  <Accordion title="Alternate direction" icon="arrows-left-right">
    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.
  </Accordion>
</AccordionGroup>

<Tip>
  Frequency filters pair naturally with a time-of-day window (*"only enter
  between 9:30 and 11:00"*). See [strategies](/concepts/strategies) for how
  filters sit alongside entries and exits.
</Tip>

## 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** | $1/side micro, $2.50/side full-size | Per-side trading fee, both entry and exit      |

You can adjust either when you build or refine a strategy. Lower-frequency ideas
feel cost less; high-churn intraday ideas can have costs that quietly dominate the
result — which is exactly why the frequency filters above matter.

<Warning>
  Backtest results are **hypothetical and simulated**, net of the modeled
  slippage and commission shown above — they are not advice. Past performance does
  not guarantee future results. Always test before you trade.
</Warning>

## Next steps

<CardGroup cols={2}>
  <Card title="Strategies" icon="diagram-project" href="/concepts/strategies">
    How entries, exits, filters, and parameters fit together.
  </Card>

  <Card title="Is the backtest real?" icon="shield-check" href="/concepts/is-the-backtest-real">
    Why the same rules and data always produce the same numbers.
  </Card>

  <Card title="Backtesting" icon="chart-line" href="/concepts/backtesting">
    Read the results, the trade list, and the exit reasons.
  </Card>

  <Card title="Build a strategy" icon="hammer" href="/guides/build-a-strategy">
    Describe an idea with exits and filters from scratch.
  </Card>
</CardGroup>