Exit Strategy Overview

The Exit Strategy is the final step of the strategy creation process (Step 4). It defines when and how your strategy closes positions — either to capture profits or to limit losses. This is where risk management meets profit protection.

The Two Exit Modes

The most critical decision in your exit configuration is choosing between Net Strategy and Per-Leg modes. This single choice determines how your entire profit/loss calculation works.

Net Strategy Mode

Calculates the combined P&L across all legs simultaneously. When the aggregate portfolio hits a target or stop-loss, the entire position closes at once.


Leg 1: Buy Call    → P&L = +₹2,000
Leg 2: Sell Call   → P&L = -₹800
Leg 3: Sell Put    → P&L = +₹1,500
                     ──────────────
Net P&L            = +₹2,700       ← This is what triggers exit

Best for: Multi-leg spreads (Iron Condors, Straddles, Butterflies) where individual leg P&L is meaningless — only the combined position matters.

Per-Leg Mode

Evaluates target and stop-loss conditions independently for each leg. Each leg has its own exit rules and can close at different times.


Leg 1: Buy Call    → Hits Target (+₹3,000) → CLOSED ✅
Leg 2: Sell Call   → Still running → OPEN
Leg 3: Sell Put    → Hits Stop-Loss → CLOSED ✅

Best for: Directional traders who want to “leg out” of positions — take profit on winners while letting hedges run.

→ Full comparison: Net vs Per-Leg Mode

Exit Components

Profit Targets

Set price points at which your strategy takes profits. Available in three unit types:

Unit	Meaning	Example
PnL	Absolute currency value	Close when net P&L reaches +₹5,000
Points	Index/instrument points	Close when net profit reaches +50 points
% ROI	Percentage of capital/margin	Close when ROI reaches +5%

You can configure multiple targets for scale-out exits (partial profit taking).

Stop-Loss

Set the maximum acceptable loss before the strategy cuts the position:

Unit	Example
PnL	Close when net loss exceeds -₹3,000
Points	Close when loss exceeds -30 points
% ROI	Close when loss exceeds -3%

Trailing Stop-Loss (TSL)

The most powerful exit mechanism — dynamically moves your stop-loss upward as profit increases, locking in gains while giving the trade room to run. Two modes available:

Mode	Description
Continuous	Shadows price tick-by-tick, adjusting the SL continuously
Step-Ladder	Creates discrete “staircases” of locked-in profit floors

→ Full details: Trailing Stop-Loss

Directional Exit Branches

In Directional mode, you can configure independent exit rules for Buy-side and Sell-side positions:


Buy Signal Exits:                    Sell Signal Exits:
  Target: +₹5,000                     Target: +₹3,000
  Stop-Loss: -₹2,000                  Stop-Loss: -₹1,500
  TSL: Step-Ladder                     TSL: Continuous

This allows different risk/reward ratios for different market directions.

Exit Evaluation Timing

Critical: Tick vs Candle

Entry Conditions evaluate on candle closes (prevents false signals from wicks)
Exit Strategies (SL/TSL) evaluate on live ticks (instant protection)

This means your stop-loss is honoured the millisecond a threshold is breached — you don’t wait for a candle to close while losses compound. See Tick vs Candle Evaluation for details.

Next Steps

Understand the critical difference between the two exit modes:

→ Next: Net vs Per-Leg Mode