Pre-Trade Checklist · Part 2
Getting Out: The 3 Ways a Trade Ends
Your exit was decided before you clicked buy. This is how you follow it — without panicking.
You found the setup. You ran the checklist. You entered. Now comes the part that separates traders who keep their gains from traders who give them all back.
Most people nail the entry and blow the exit. They panic on a red candle and dump a winner early. Or they freeze on a loser and ride it into the ground. Same mistake both times: deciding the exit in the moment, on emotion.
You don't do that.
Your exit was set before you ever clicked buy. This post is simply how you follow it.
This is the companion to the pre-entry chart audit. If you haven't read that one, start there.
First — the 3 numbers
Every trade has three prices written down before you enter. The scanner sets all three for you.
That's the whole map. Everything below is just reacting to which number the stock hits first.
The 3 ways out
A trade can only end three ways. That is it.
| Exit | Trigger | What you do |
|---|---|---|
| Stopped out | daily close below stop | you were wrong — take the small loss |
| Target 1 | +8% | sell half, move stop to breakeven |
| Target 2 | +15% | close the rest, or trail |
WAY 01
Stopped out — you were wrong
Trigger: the stock closes the day below your stop.
What you do: sell. Take the small, planned loss. Move on.
This is not failure — it is the system working. A defined, small loss is the price of doing business. The traders who blow up are the ones who refuse the small loss and let it grow into a big one.
WAY 02
Target 1 hit (+8%) — sell into strength
Trigger: the stock reaches +8% from your entry.
What you do: sell half your position. Then move your stop up to breakeven — your original entry price.
This is "selling into strength," and it is the single most important habit for a beginner to build.
WAY 03
Target 2 hit (+15%)
Trigger: the remaining half reaches +15% from entry.
What you do: close the rest and book the full win — or, if it is still running hard, trail it (next section).
A short word on trailing
Trailing means your stop follows the price up and locks in gains as the stock climbs. If it keeps running, you stay in. The moment it drops back by your set amount, you're out — at a much higher price than where you started trailing.
Two ways to actually do it
The Odd Lot way (preferred): trail by hand at your end-of-day check. As the stock makes higher lows, move your stop up underneath them. Exit on a daily close below it. No resting order sitting in the market to get shaken out.
The broker auto way: both apps can trail for you with one order type — but the names and quirks differ:
Order type: Trailing Stop
Set the trail as a percentage or a dollar amount.
Heads up: it fires on any intraday dip that hits the trail — even a quick wick. Good days can shake you out.
Order type: Trailing Stop (sometimes shown as "Stop Trailing")
Set the trail amount or percentage on the order ticket.
Two quirks: it only works during regular market hours, and it expires at day's end — you must re-place it each morning.
Why Odd Lot prefers the manual close-based trail: a resting order fires on intraday spikes — the exact stop-hunt move this system is built to dodge. Use the broker order only if you can't check at the close, and know it can shake you out on noise.
The one rule that saves accounts
This is the most important rule in this entire post.
Your stop is only triggered by the daily closing price — never by what happens during the day.
Why: big institutions deliberately spike prices down to trip everyone's resting stops, buy the cheap shares, then let it recover. React to the intraday dip and you got hunted. Wait for the close and you don't.
| What happens | Your move |
|---|---|
| Price stabs below your stop at 11am, recovers by 4pm | Nothing. You're fine. |
| Price closes below your stop | Now it counts. |
And it takes two:
1 close below stop → warning. Stay alert.
2 closes below stop in a row → you're out. No debate.
You get one "hold through a warning" per trade if your reason for the trade is still intact. Use it rarely.
The EOD check — your 5-minute routine
You don't watch the screen all day. You check once, after the close.
After 4pm ET, run the End of Day check. The scanner pulls the closing price for every open trade and tells you exactly what to do:
| Closing price | The scanner says |
|---|---|
| Between stop and T1 | Hold — here's your P&L |
| At or above T1 | Take T1 — sell half, stop to breakeven |
| At or above T2 | Book the win |
| Below stop | Warning — or forced exit if it's the second |
Five minutes, then you close the laptop. That's the discipline — the system watches so you don't have to stare.
The 4 outcomes — all of them are fine
Every trade ends one of four ways. Three are wins or breakeven. The fourth is small and planned.
Here's the mindset shift: if you followed the process, all four are good trades. A small planned loss you took on time is a win for your discipline. The outcome of any single trade doesn't tell you whether you traded well. The process does.
That's the full loop
Three ways out — stop, Target 1, Target 2. Decided before you entered, followed without emotion, checked once a day at the close.
Entry plus exit is the whole trade. The setup gets you in. The plan gets you out with your gains intact — which is the only part that actually pays.
Nobody can predict the trade. You can run the process.
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