Exit Rules✓ Mathematical
◆ The PatternMechanical exit rules to limit drawdowns
Stops enforce discipline. Types:
| Type | Trigger | Pro / Con |
|---|---|---|
| Hard stop | Fixed price | Simple / ignores context |
| Percentage | X % from entry | Scales with price |
| ATR-based | N × ATR from price | Volatility-aware |
| Trailing | Tracks new highs | Locks profit / whipsaw risk |
A 2×ATR trailing stop is a popular default — tight enough to limit loss, wide enough to survive normal noise.
// Interactive — ATR multiplier and stop placement
ATR multiplier
Mental stops fail. Paper stops get overridden by emotion — always enter with a hard order.
Pattern bridge: ATR calculation in Indicators — ATR.