Exits and entries are perfect compliments to your trading system. They are siamese twins that should not exist without one another – nor should they be separated at birth or otherwise.
Risk management defines your P&L and the distance between your entry and exit is critical to how you manage risk.
You can define that distance by calculating the ATR of the security that you’re trading and using those as the entry and exit endpoints to your rules. Marry that with your position size given the size of your account and the volatility of security.
So the three crown jewels to trading are entries, exits, and position size. They are all calibrated to work with one another and rely on one another to help you create alpha for you and your clients.
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