The Workshop · The Trade Desk · one trade at a time · 5 of 11
Replay the same trade under five other exits. The one the rules use was not chosen for this trade; it was tested on thousands.
The rule that closed SHOP was written before the trade existed: Alpha closes under 60, or day 21. It closed on day 21 at +16.9%. Here is the same path with other exits applied to it, including the ones most people would reach for. Click each.
| exit | closed on | result |
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One trade proves nothing about an exit, and that is the first lesson here: on SHOP some of the alternatives did better than the rule, some worse, and whichever did best would not have been the best on the next name. The rule is not the exit that was best on SHOP. It is the exit that averaged best over every strength run since 2019, and it is the exit the number beside the trade was computed with. Change the exit and the number beside the line is no longer true.
Key insight. A stop-loss on a relative-strength trade sells on the market's bad day, not the name's. The desk's exits read the thing the entry read: the name's standing against the market, and a clock. Both were tested; the replay is in The Math, lesson 8.
Alpha closes under 60. The run that justified the entry has ended; the name is no longer being bought harder than the market explains. Day 21. Runs have a half-life; by the fourth week what is left is mostly noise, and the replay says to hand the slot to a fresher one. In a Trending tape only 13% of runs are still alive at day 21.
Every line shows its exit beside it and how far the name is from it, in Alpha points and in days. When it fires, the trade closes on the house book and the tracker sends the alert; nothing waits for an opinion. The manual's chapter: the list, including the exits.
Keep this: an exit is part of the trade, not a decision made during it. The tested number only holds with the exit it was tested with.
Analytical tools and historical measurements for educational and informational purposes only; not investment advice or a recommendation. Replayed figures are hypothetical: today's rules applied to past prices, after modelled costs, and no account was traded on them. Hypothetical results have inherent limitations and do not represent actual trading. Past performance, including backtested results, does not guarantee future outcomes. Trading stocks involves substantial risk of loss.
The Workshop is education, not advice. Replayed numbers are averages over many trades, after average trading costs (2 bps a side on a stock, 1 on a fund, included for fairness; yours vary by broker and liquidity) unless stated, and are not forecasts; the live record is on the engine page. Analytical tools and historical measurements for educational and informational purposes only; not investment advice or a recommendation. Replayed figures are hypothetical: today's rules applied to past prices, after modelled costs, and no account was traded on them. Hypothetical results have inherent limitations and do not represent actual trading. Past performance, including backtested results, does not guarantee future outcomes. Trading stocks involves substantial risk of loss. About · Support · Terms · Privacy · Refunds Open the deskManualThe EngineChangelog