What Is the Best Stop Or Exit for Swing Trading?(Overview)

With so many factors affecting the profitability of a trading strategy, using the right stop or exit method is necessary if you want to stand a chance of making money in the market. But must it be a stop-loss order? Are there other options for risk management, and what is the best exit strategy for swing trading?

The truth in swing trading is that there is no specific best stop or exit. As a matter of fact, a stop normally hurts performance!

A stop loss is an order placed with a broker to exit a trade once the market reaches a certain price against your position. Your stop loss level is the price level where you accept to realize a loss in order to prevent further potential losses on that specific trade. You set this price in advance either physically by placing the stop order with your broker or mentally by marking the price level at which you manually close the trade at a loss. The use of a stop loss is a common part of risk management, but it may not always serve your interest.

Related reading: – Searching for a list of free trading systems? (We have hundreds)

In this post, we take a look at the various stop or exit practices for swing trading. At the end of the article, we provide a few options that we consider better than stopping-loss.

First, let’s define what a stop-loss is: