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Quit point

A pre-agreed line - in money, time, or drawdown - at which you stop trading a strategy, an account, or the attempt altogether.

Decisions to stop are almost impossible to make well in the moment, because the moment is always the worst one. A quit point is written in advance, when you have nothing at stake, and it is the difference between a bounded experiment and an open-ended one.

Useful quit points are specific and observable: a hard capital floor for the account, a drawdown beyond the historical maximum of the system, a date by which defined milestones must be met, a savings level below which you stop funding the attempt.

Deciding to stop is not failure, and the alternative is worse. Traders who never set a quit point tend to discover one at the point where there is nothing left to decide with.

Related: grit-vs-stubbornness, risk-of-ruin, scared-money, financial-stress

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