The brutally honest truth about exits: it’s not your entry that’s the problem — it’s your panic to leave too soon.
Real Talk: You nailed the direction. The stock moved just like you predicted.
So why did your PnL still suck?
Because you sold too early — again.
And if you're like 90% of retail options traders, you're missing the one exit signal that actually tells you when to stay in.
😖 The Pain of Watching It Keep Running After You Exit
Let’s paint a familiar picture:
You buy calls.
Stock starts climbing.
Your PnL flashes green — maybe +30%, maybe +45%.
You panic — “green is good,” you tell yourself — and sell.
Then...
The stock really starts to move.
Your options would’ve hit +150%.
Now you're sitting with crumbs — and regret.
Sound familiar?
It’s not about being greedy.
It’s about not having a real, data-backed signal that tells you:
“It’s okay, this move is still healthy. Stay in.”
🚨 The #1 Exit Signal You’re Missing: Momentum Divergence + Volume Confirmation
Most retail traders exit based on profit percentage — not price behavior.
Here’s what smart traders are using instead:
📌 Momentum Divergence + Volume Drop = High-probability sign the move is done.
Let’s break this down in plain English.
🧠 What Is Momentum Divergence?
It’s when the price is still rising, but the momentum indicators (like RSI or MACD) are falling.
That means price is moving... but with less "oomph."
It’s like a car still rolling forward, but you’ve taken your foot off the gas.
🚩 That’s a warning sign.
But here’s the key: you don’t exit just on divergence — you wait for confirmation.
🔍 The Confirmation? Volume Drop-Off After a Big Push
Price spikes, momentum stalls, and then volume starts shrinking.
That combo means:
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Fewer buyers are stepping in
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The big move is likely over
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It’s time to scale out or exit fully
✅ How to Spot It (Without Fancy Tools)
You don’t need expensive software or a Bloomberg Terminal.
Here’s how to use basic indicators to avoid premature exits:
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Use RSI or MACD on a 15-min or 1-hour chart
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Watch for price hitting new highs while RSI fails to follow (momentum divergence)
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Check volume — if it’s declining while price still crawls up, that’s your cue
That’s your exit signal. Not your PnL. Not your gut. Not Reddit.
📉 Real Example: AMD 150c Trade
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You enter on a breakout above $144
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The move runs to $148. Your calls are up 40%
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You see RSI diverging: price goes up, RSI goes down
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Volume shrinks dramatically on the next green candle
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You hold until that candle closes red = you exit at $149 = 100% return
(vs. the 40% you almost took too early)
That’s the power of waiting for the real signal.
😬 Why Retail Traders Don’t Do This
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We trade emotionally, not technically
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We think green = good and don’t want to “lose profits”
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We fear reversals without understanding the signs
But here’s the thing:
You’re not paid for being early. You’re paid for riding the wave.
And the wave doesn’t end until momentum dies and volume fades.
🧘♂️ How to Practice This Without Losing Your Mind
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Screenshot Your Exits: Each time you exit early, mark it. Did the divergence+volume combo happen? If not, note it.
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Build a 3-Candle Patience Rule: Wait for 3 small candles after the initial surge before deciding to exit.
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Scale Out Instead of All-Out: Take 50% profit if you're unsure, but hold the rest until divergence shows up.
💥 The Result? Fewer Regrets, Bigger Wins
When you start exiting based on actual behavior of price and volume, not just emotions, something magical happens:
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You stop feeling FOMO
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You trust your process
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And you actually let winners run
The truth?
Your entry doesn’t need to be perfect — but your exit will make or break your account.
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