Exit Point Definition – What is Exit Point? | CFI VU

exit point

The exit point is the time that a trader decides to close their position. Knowing when to take or bank profits that were earned is one of the most crucial factors of trading.


Locating the perfect exit point is not a clear-cut process and can become quite troublesome for traders. There is no singular sure-fire way to implement this process in a profit-earning capacity.


Three strategies have proved effective in aiding with a profitable exit point; the ATR or average true range, the [moving average], and lastly the conventional method of [stop-loss]. However, over the continual trading process, each trader develops their own set or different strategies that work for them while employing risk management.


Both [entry] and exit points are pivotal to a trader’s strategy as they seek to increase their profits and manage their losses at the same time.


For first-time traders, it is highly recommended to begin with a demo account or a [paper trading] with CFI. Having a demo account allows a new trader to test new strategies and techniques as well as test and refine their trading strategy in a risk-free environment, helping them to prepare for the scenarios that they will face in the markets, before introducing the risk of sacrificing actual securities or assets.


The recommendation will always be “enter low and exit high” but not without proper strategies for each point mentioned. It is common for traders to be overly focused on the entry point and not have a workable strategy in place for exiting, leading them to lose out on profit-earning opportunities.


Two common approaches for an effective strategy are to either exit on strength or exit on weakness.


Key takeaways:


  • An exit point is when a trader decides to close a position
  • Knowing when to take profits is a crucial factor in fx trading
  • ATR, moving average, and stop-loss are three effective exit strategies
CFI Financial Group is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
Credit Financier Invest Limited has regulated subsidiaries in
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Important Disclaimer:

We would like to remind that while we endeavour to provide best possible services, Credit Financier Invest Limited provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited.

Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest Limited provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.

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