Always have a reason to get into a trade, and then a reason to get out of one. Having a trading plan gives you an edge over the traders that use emotions, predictions, and opinions to make trading decisions.

  1. Your original stop loss is hit at a price level that shows your original entry was wrong.
  2. Your trailing stop is hit in your time frame.
  3. The position closes below the previous day’s low for shorter term traders.
  4. A key price support level is lost.
  5. A key moving average is lost.
  6. Your profit target is achieved.
  7. The chart enters a historical overbought level for your trading vehicle.
  8. Volatility expands and the risk is now too much for your position size. Or you exit due to a volatility stop.
  9. Your time stop is hit because the trade failed to move in the time you allotted.
  10. You are traveling or going on vacation and you can’t give the trade the attention it requires.