Exit discipline
Exit plan and invalidation checklist
A trade without an invalidation point is not a plan; it is a position waiting for a story.
- Entry: exact condition that permits the trade.
- Invalidation: what proves the thesis wrong?
- Profit-taking: target, scale-out, or time-based exit.
- Loss management: max loss, stop logic, hedge, or adjustment rule.
- Portfolio check: what other positions lose if this thesis fails?
- Review: what will you record after closing the trade?
Primary reading: Investor.gov risk tolerance overview · FINRA options overview and risk · SEC Investor Bulletin on options · OIC options pricing overview · OCC Options Disclosure Document