Entry Signal & Exit Signal

An entry signal is the specific condition a trader's strategy requires before opening a trade — a candlestick pattern, an indicator crossover, a break of a key level — while an exit signal is the equivalent condition for closing it, whether at a profit target, a stop-loss, or a reversal signal. Clearly defining both in advance, before entering a trade, is what separates a rules-based approach from purely discretionary guessing. A strategy is only as testable (and as disciplined to follow) as its entry and exit signals are precise and repeatable.