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QuantSchool: Rules for entry and exit

Core Principles of Trade Execution

Consistent profitability requires mechanical rules that remove emotional decision-making from trade entry and exit points.

Entry Rules

1. Signal Confirmation

• Require multiple confirming indicators (price, volume, momentum)
• Wait for pattern completion (closed candles, confirmed breaks)
• Validate against higher timeframe context

2. Precision Entry Parameters

• Exact price or narrow zone for execution
• Specific time window for entry validity
• Minimum volume/liquidity thresholds

3. Position Sizing Formula

• Fixed percentage of capital (1-2% risk per trade)
• Volatility-adjusted position scaling
• Account for portfolio correlation

Exit Rules

1. Profit-Taking Discipline

• Predefined target zones (not single price points)
• Partial profit-taking scales (25/50/25%)
• Trailing stop protocols for strong trends

2. Loss Management

• Hard stop-loss on every position
• Maximum loss threshold (3-5% per trade)
• Time-based exits for stalled positions

3. Conditional Adjustments

• News event overrides (earnings, FOMC)
• Liquidity crisis protocols
• Position hedge triggers

QuantWave Execution Framework

Phase	Rule Type	QuantWave Feature
Pre-Entry	Signal Validation	Multi-timeframe confirmation
Entry	Precision Execution	Optimal entry zone calculator
Management	Dynamic Adjustments	Real-time position monitor
Exit	Systematic Closing	Automated alert triggers

Key Execution Metrics

• Entry slippage tolerance (max 0.2%)
• Fill rate requirements (95%+)
• Time-in-trade distributions
• Win/loss ratio maintenance (2:1 minimum)

Common Pitfalls

• Moving stops further away
• Taking early profits from fear
• Adding to losing positions
• Overriding valid signals

Implementation Checklist

1. Define all rules in written trading plan
2. Backtest against historical data
3. Paper trade for protocol validation
4. Establish performance review cycle

Mechanical entry and exit rules, when consistently applied, transform trading from emotional speculation to disciplined execution. QuantWave's systematic approach provides the framework for these rules while allowing customization for individual risk parameters.