Automating Exits: Using Advanced Exit Orders in NinjaTrader

Successful traders understand that exits are just as crucial as entries, and experienced traders often use advanced exit strategies. One of the main reasons to use NinjaTrader is the advanced tools available  — including ones for exiting positions. Here’s how you can use NinjaTrader add-ons to place advanced exit orders when trading.

Automating Advanced Exits With NinjaTrader

Any tool you use for exiting positions should have two primary features. It should provide many ways to structure exits, and also integrate with any other NinjaTrader tools you use.

Having many ways to structure exits lets you change strategy as needed. You may use conditional orders when hedging, tiered exits when following a trend, and indicator-based exits for specific technical trades. Even if you generally employ the same exit strategy across trades now, it may be necessary to change your strategy when market conditions shift.

Automating exit structures allows you to spend more time focusing on technicals, and also reduces latency between when an order is executed and when your exit strategy is in place. The latter is significant for scalpers and short-term day traders, when just a minute delay could prove costly. The former maximizes the time spent on analysis.

Using Advanced Exit Strategies

There are several advanced exit strategies that traders use. You might rely heavily on one or two of these, or use a combination across positions and accounts.

Trailing Stop Losses

Stop losses are one of the first risk management strategies that beginner traders learn about. Should a trade go in the wrong direction, a stop loss should trigger an automatic exit to minimize losses.

Trailing stops are a slightly more advanced type of stop loss. Rather than being a fixed price point, they adjust as the price of an equity, a derivative, or a future changes. As the price goes up, so does the stop.

For example, consider a trailing stop that’s $1 below the current market price. The initial stop would be $19 if you entered a trade at $20, but that trailing stop would increase to $24 if the price increased to $25. An exit would be triggered at $24 in this case, ensuring you retain most profits.

Trailing stop losses protect downside while locking in gains, ensuring a $4 gain in the example.

Event-Driven Exits

Speculative traders base their exits primarily on events. Whether you sell the news, get out before earnings calls, or day-trade economic releases, exiting these positions is time-based.

Some more advanced NinjaTrader exit tools allow for time-based exits. You usually have to set up each exit individually since they’re based on events, but you can pre-program selling (or buying if short).

When speculatively trading, being able to use trailing stop losses is especially important. You need downside protection while maximizing upside potential.

Partial Closures

Sometimes you don’t know precisely when to close a position. There might be potential for further gains, but price action could become less specific. In these situations, partial closures are functional. You may also know this strategy as scaling out or tiered exits.

One of the most common tiered exits is to “take profits and let it run.” The general idea is to lock in some profits — and preserve your initial investment — fairly early on. The remainder is “let run” to avoid missing a significant opportunity in the right direction.

For example, you may make a $100 play on a highly speculative event. If the price initially increases to $110, you could sell $100 and let the $10 run. You’ll break even at worst, and could double the $10 for a nice 20% total gain.

Many other strategies use multiple exits that are smaller than selling the majority of a position. The number of exits and proportion of each is entirely your choice.

Indicator-Based Exits

Indicator-based exits are entirely technical, closing positions based on RSI, VWAP, or moving averages, for instance. You might sell when RSI reaches 80, or when price action bounces on the 21-day EMA. These can be used as take-profit targets or stop losses, and almost any indicator can be used. 

If trading based on indicators, it’s vitally important that your exit tool and indicator tools are fully integrated. The exiting tool should automatically close the moment that your indicator triggers.

Conditional Exiting Strategies

Some of the most complex editing strategies are conditional orders, either “one cancels the other” (OCO) or “one sends the other” (OSO):

• OCO orders automatically cancel a second linked order once the first is executed. This is necessary if using both profit targets and stop losses, and it’s also a good way to exit hedges.
• OSO orders automate order chains, initiating subsequent orders only after the initial order executes. For example, selling a leading industry stock can automatically trigger exit orders for related stocks.

If you hedge using multiple accounts, you’ll also need to use an advanced trade copier that works with your existing tool. Professional trade copiers can execute these advanced orders across multiple account types.

Advanced Exit Orders Management

At Affordable Indicators, our Advanced Exit Orders can set up these various exit strategies, and you can use multiple different strategies simultaneously across positions or accounts. We have one of the most advanced NinjaTrader exit tools, and it fully integrates with both NinjaTrader and our other tools.

Advanced Exit Orders can be used on its own for fully customizable exit strategies, or integrate it with the Account Risk Manager and Duplicate Account Actions for a more comprehensive setup. Of course, you can also link it with any of our NinjaTrader indicator tools if you exit based on indicators.

Learn more about our Advanced Exit Orders solution and how it could integrate into your trading strategy. You’ll find it offers the options you need, seamless integration with NinjaTrader and other tools, and gives you the flexibility necessary for more accurate trades. Master the exiting half of trading, and you’ll be on your way to more gains. Here’s to trading.