When do you get out?

The exit, decided first

Three lines drawn before buying: what was paid, where the buyer agreed to admit being wrong, and where they agreed to take what they came for. The path between them is whatever the market does.

The two owners in the last chapter were both deciding in the middle of the feeling. That is the worst time to decide anything. So a habit many experienced traders describe is deciding the way out before they go in.

Two numbers, written down before buying. The first is where you will admit the idea was wrong and sell: the stop. The second is where you will take what you came for and sell: the target. Between them, you do nothing but wait.

A stop can be left with your broker as a standing order: if the price falls to this number, sell. It does not promise that exact number. If the price jumps straight past it, say overnight on bad news, the sale happens at the first number available, which can be worse.

A stop taught alone is half the lesson. Where the target sits beside it decides whether the whole idea is worth trying: with a target twice as far away as the stop, one result that reaches the target makes up for two that reach the stop, before costs and if the stops fill at their numbers.

Said with a food truck

Before you buy the slip for sixty-five, you write two lines on the back of it. "If the best offer falls to fifty-eight, I sell." "If someone offers seventy-nine, I sell."

Then winter comes, the offers drop, and your stomach tells you to wait for spring. But you are not deciding now; the you of last month, calm and fed, already decided. You read the back of the slip and do what it says. If the critic’s rave comes instead, the same note tells you when to stop hoping for more.

That is step seven. The next chapter asks the question the stop makes possible: how much to put in.

Nothing here is advice. The whole ladder is on one page; the app behind it is free to start - the door opens to any address. Education only. Pumpstradamus is a paper trading app: no real money is traded, and we are not a broker or an adviser.