Exit Rules

Exit rules determine when and how your strategy closes an open position. A well-designed exit strategy is just as important as your entry logic — it controls how much profit you capture and how much risk you are exposed to on every trade. Arconomy provides several categories of exit rules that can be used individually or in combination.

How Exit Rules Work

Exit rules are evaluated continuously while a position is open. Unlike entry rules where all conditions must align simultaneously, exit rules operate independently by default: if any single exit rule triggers, the position is closed. This "first to fire" behaviour ensures that your most protective exit (typically the stop loss) always takes precedence.

You can modify this behaviour on the canvas by connecting exit rules in series, which requires multiple exit conditions to be true before closing a position. However, stop loss and take profit rules always operate independently regardless of canvas arrangement for safety reasons.

Stop Loss

The Stop Loss rule closes a position when the price moves a specified distance against you. Arconomy supports three stop loss methods, each suited to different trading styles and market conditions.

Fixed Stop Loss

A fixed stop loss sets a static price distance or percentage from your entry price. Once the position is opened, the stop level does not change regardless of subsequent price movement. This is the simplest stop loss method and provides a clear, predictable risk amount per trade.

Parameter	Description	Default	Range
Stop Distance	Distance from entry price (in pips, points, or percentage)	50 pips	1 – 10,000
Distance Unit	Pips, Points, Percentage, or Currency Amount	Pips	—
Execution	Market order (immediate) or Limit order (at exact level)	Market	—

Exit Rule: Fixed Stop Loss
  Distance: 1.5%
  Unit: Percentage
  Execution: Market

Trailing Stop Loss

A trailing stop loss moves with the price as it moves in your favour, locking in profit while still providing downside protection. The stop level only moves in the profitable direction and never moves backwards. This allows you to capture extended trends while protecting accumulated gains.

Parameter	Description	Default	Range
Trail Distance	Distance the stop trails behind the best price achieved	30 pips	1 – 10,000
Distance Unit	Pips, Points, Percentage, or Currency Amount	Pips	—
Activation Threshold	Minimum profit before the trailing stop activates (0 = immediate)	0	0 – 10,000
Step Size	Minimum price movement required to update the stop level	1 pip	0.1 – 100

ATR-Based Stop Loss

An ATR (Average True Range) based stop loss dynamically adjusts the stop distance based on current market volatility. In volatile markets, the stop is placed further away to avoid premature exits from normal price fluctuations. In calm markets, the stop tightens to protect gains more aggressively. This method adapts automatically to changing conditions without requiring manual parameter adjustments.

Parameter	Description	Default	Range
ATR Period	The lookback period for the ATR calculation	14	2 – 200
ATR Multiplier	The multiple of ATR used for the stop distance	2.0	0.5 – 10.0
Trailing	Whether the ATR stop trails with price movement	Yes	—
Recalculate	Whether to recalculate ATR on each bar or use the entry bar's ATR	Entry Bar Only	—

Exit Rule: ATR Stop Loss
  ATR Period: 14
  Multiplier: 2.0
  Trailing: Yes
  Recalculate: Entry Bar Only

Take Profit

Take Profit rules close a position when the price reaches a specified profit target. They ensure that unrealised gains are captured before the market reverses.

Fixed Take Profit

A fixed take profit sets a static price target at a specified distance from your entry price. The position is closed immediately when the target is hit.

Parameter	Description	Default	Range
Profit Target	Distance from entry price to the take profit level	100 pips	1 – 50,000
Distance Unit	Pips, Points, Percentage, or Currency Amount	Pips	—
Partial Close	Close a percentage of the position at the target, leaving the rest running	100%	10% – 100%

Ratio-Based Take Profit

A ratio-based take profit calculates the target as a multiple of your stop loss distance, establishing a reward-to-risk ratio. This approach ensures that your winners are proportionally larger than your losers. For example, a 2:1 ratio means your take profit target is twice the distance of your stop loss.

Parameter	Description	Default	Range
Risk-Reward Ratio	The take profit distance as a multiple of the stop loss distance	2.0	0.5 – 20.0
Reference Stop	Which stop loss rule to use as the reference for the ratio calculation	Primary Stop	—
Partial Close	Close a percentage of the position at the target	100%	10% – 100%

Time-Based Exit

Overview

The Time-Based Exit rule closes a position after a specified duration has elapsed since entry, regardless of profit or loss. This rule is useful for strategies that rely on short-term momentum or time-sensitive setups where holding beyond a certain period increases risk without a proportional increase in expected return.

Key Parameters

Parameter	Description	Default	Range
Max Duration	Maximum time the position can remain open	24 hours	1 minute – 90 days
Duration Unit	Minutes, Hours, Days, or Bars	Hours	—
Exit Condition	Close at expiry regardless, or only if in profit / only if in loss	Always	—
Market Hours Only	Only count time during active market hours	Yes	—

Typical Use Case

A time-based exit set to 5 bars works well for momentum strategies on the daily chart, where the expected move should occur within a week of entry. If the trade has not developed by then, the setup is considered invalidated. Combining a time-based exit with a trailing stop allows profitable trades to be captured while ensuring stagnant positions are cleared promptly.

Exit Rule: Time-Based Exit
  Max Duration: 5
  Unit: Bars
  Condition: Always
  Market Hours Only: Yes

Indicator-Based Exit

Overview

The Indicator-Based Exit rule closes a position when a technical indicator reaches a specified condition. This is similar in structure to an entry rule but is evaluated only while a position is open. You can use any of the indicators available in the platform — RSI, MACD, Stochastic, Bollinger Bands, and more — to define exit conditions based on momentum exhaustion, trend reversal signals, or volatility changes.

Key Parameters

Parameter	Description	Default	Range
Indicator	The technical indicator to evaluate (RSI, MACD, Stochastic, Bollinger Bands, etc.)	RSI	—
Indicator Parameters	Configuration specific to the selected indicator (period, levels, etc.)	Varies	Varies
Exit Condition	The condition that triggers the exit (crosses above/below a level, changes direction, etc.)	Crosses Above	—
Apply To	Long positions only, Short positions only, or Both	Both	—

Typical Use Case

A common indicator-based exit uses the RSI reaching overbought territory (above 70) to exit long positions, capturing profit as momentum wanes. For short positions, the exit triggers when RSI drops below 30. This approach allows profitable trades to run until the indicator signals that the move is exhausting, rather than using a fixed profit target that may leave gains on the table.

Opposite Signal Exit

Overview

The Opposite Signal Exit rule closes a position when the strategy's entry rules generate a signal in the opposite direction. If you are in a long position and the entry logic produces a short signal, the long position is closed (and optionally reversed into a short position). This rule effectively makes your strategy "always in the market" by flipping between long and short positions as conditions change.

Key Parameters

Parameter	Description	Default	Range
Reverse Position	Automatically open a position in the opposite direction after closing	No	—
Signal Source	Which entry rule(s) to monitor for opposite signals	All Entry Rules	—
Require All Signals	Require all specified entry rules to confirm the opposite direction	Yes	—

Typical Use Case

The Opposite Signal Exit is natural for trend-following strategies based on Moving Average Crossovers. When the fast MA crosses below the slow MA, any open long position is closed. With the Reverse Position parameter enabled, the strategy simultaneously opens a short position, staying continuously aligned with the prevailing trend direction.

Combining Exit Rules

Most robust strategies use multiple exit rules working together. A common combination includes:

1. Stop Loss (ATR-based or fixed) — Protects against adverse moves and defines the maximum risk per trade.
2. Take Profit (ratio-based) — Captures gains at a predetermined reward-to-risk level.
3. Trailing Stop — Activates after the take profit captures a partial position, letting the remaining position run with the trend.
4. Time-Based Exit — Closes any position that has not reached a stop or target within the expected timeframe.

Exit Strategy Example:
  1. ATR Stop Loss: 2x ATR(14), trailing
  2. Ratio Take Profit: 2:1 R:R, partial close 50%
  3. Trailing Stop: 1.5x ATR, activates at 1:1 R:R
  4. Time Exit: 10 bars maximum hold