Investopedia

Continue to Site »

Exit Point

Filed Under » , , ,
Dictionary Says

Definition of 'Exit Point'

The price at which an investor sells an investment. The exit point is usually decided as part of a premeditated trading strategy meant to mitigate investment risk and take the emotion out of trade decisions. Exit strategies are used by virtually all finance professionals and are a key component to successful trades.
Investopedia Says

Investopedia explains 'Exit Point'

For example, an investor decides to buy 100 shares of XYZ stock at $33. Before purchasing the shares, he decides that he will sell if the price drops to $30 a share. This way, he knows in advance that his maximum loss, or his risk, will be limited to $300, or a 9% loss. The investor would also choose an exit point for an increase in the stock's price, say, $40. Deciding in advance can help save an investor from holding on too long in either direction. On the other hand, many investors consider it a bad practice to sell if a company's fundamental situation hasn't weakened.

Articles Of Interest

  1.

    A Look At Exit Strategies

    Setting appropriate exit points should help you avoid taking premature profits or running losses.

  2. Patience Is A Trader's Virtue

    Waiting may be the biggest key to reeling in that trophy investment.

  3. An Introduction To Oscillators

    Find out how this indicator may help improve the average investor's entry and exit points.

  4. Market Summary For May 17, 2013

    The U.S. stock markets moved sharply higher this week, on track for its fourth straight week of gains, driven by ongoing improvements in economic indicators.

  5. Parabolic SAR Buy Signals

    The Parabolic SAR indicator is flashing "buy" in these four diverse stocks. Not simply relying on one indicator though, I take a look at the overall technical outlook and determine which ones ...

  6. Market Summary for May 10 2013

    Major U.S. indices moved higher this week but, given the new highs, traders should watch for retracements next week.

  7. Buying The Upward Trend Channel Bounce

    Find out how to set up the trades for four stocks that are moving higher within well-defined trend channels.

  8. Market Summary for May 3 2013

    The U.S. stock market extended its rally higher this week, led by technology stocks and lagged by small-cap stocks. Traders should be watching a number of other reports due out next week.

  9. Specific Stocks "Hammering" Out a Bottom

    A Hammer candlestick pattern can signify a turn-around in a stock, marking the shift from a downtrend to an uptrend. Here's how to indentify the signal, along with four stocks which may be hammering ...

  10. Market Summary for April 26 2013

    The major U.S. indices moved higher this week, led by technology stocks on the NASDAQ and lagged by the DJIA. Foreign markets also experienced a relatively bullish week, led by Japan’s Nikkei ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  5. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  6. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
Trading Center