Algorithm Trading Exit Strategy

Discover backtested algorithm trading exit strategies for futures markets. Learn how ATR and fixed dollar profit targets perform across 44 markets.

Published · Updated · Methodology: Technical Indicators

Part of: ATR & Volatility

  • Methodology: Technical Indicators
  • Content type: educational
  • Timeframes: 122 minute bar chart (example mentioned), Various bar sizes (general mention)
  • Markets: Micro NASDAQ (example mentioned), 44 Futures markets

Indicators used

  • ATR

Source video

Decoded from: I've FOUND the BEST ALGORITHM TRADING "TAKE PROFIT" EXIT STRATEGY 💸 [100% BACKTESTED!] by Algo Trading With Kevin Davey — watch the original

Key timestamps:

  • 0:00 - Introduction to exit strategy testing
  • 1:25 - Explanation of rigorous testing methodology
  • 2:45 - MultiWalk software for testing
  • 4:00 - Types of exits tested (stop and reverse, dollar-based, ATR-based, bars-on-entry, profit protectors, technical exits)
  • 5:00 - Metric for analysis: Profit and Loss divided by Average Drawdown
  • 5:25 - Top two exit strategies revealed
  • 6:20 - Warning about using profit targets alone
  • 7:00 - TradeStation EasyLanguage code mention

Strategy overview

Average True Range measures how much ground price typically covers in a bar, which is why it is the standard yardstick when a trader wants an exit that adapts to current conditions instead of sitting at a fixed distance. This entry, though, is not a setup — the source video is a comparison study. Kevin Davey lines up whole families of take-profit exits against each other and asks which one holds up under testing, with ATR-scaled targets entering as one contender in the field rather than as the answer.

The field the video tests is deliberately broad: stop-and-reverse, dollar-based targets, ATR-based targets, bars-since-entry time exits, profit protectors and technical exits, run in batch through walk-forward testing software across a range of bar sizes — including unconventional ones like a 122-minute chart, a tell about the author's preference for results that survive many configurations rather than one flattering chart. The most consequential decision in the whole exercise is the ranking metric: net profit and loss divided by average drawdown. That single choice is what crowns a winner, and it is worth understanding before accepting any leaderboard — a different denominator promotes a different exit.

The video is titled "I've FOUND the BEST ALGORITHM TRADING 'TAKE PROFIT' EXIT STRATEGY [100% BACKTESTED!]", and it is fair to read that framing as the conclusion of one test population, not a universal ruling. No rule set was recovered from this source, so this page catalogues the concept and the testing approach rather than a rule-by-rule breakdown — which suits the material, since the transferable part here is the comparison method you can rerun on your own strategies, not a parameter to copy.

Topics

trading strategy · exit strategy · futures trading strategy · algorithm trading · backtesting strategy · technical indicators · average true range · atr strategy · profit target · micro nasdaq strategy · tradingview strategy · swing trading

Frequently asked questions

What is an ATR-based take-profit exit?

It is a profit target placed at a multiple of the Average True Range from the entry price, so the target stretches when volatility expands and tightens when the market goes quiet — unlike a fixed point or dollar target, which means something different in every regime.

How does this video decide which exit strategy is best?

It ranks the tested exits by net profit and loss divided by average drawdown. That ratio rewards steadiness as much as size, so an exit that earns more but with deeper equity dips can finish behind a smaller, smoother one.

What kinds of exits are compared?

The video works through several families: stop and reverse, dollar-based targets, ATR-based targets, bars-since-entry time exits, profit protectors, and technical exits — tested in batch across various bar sizes rather than on a single market and interval.

Do exit results from one test transfer to my own strategy?

Not automatically. An exit's ranking depends on the entries it is attached to and the markets it was tested on, so the honest use of a study like this is as a testing template to rerun on your own systems. Strategy Decoder catalogues the concept and source video here; no extracted rule set was recovered from this material.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

Strategy Decoder catalogs 2,229 decoded strategies. Each one is extracted with confidence scoring, cross-linked to the indicators it uses, and kept up to date as new videos are processed daily. Load this page with JavaScript enabled to use the interactive tools, or start from the strategy explorer to filter by methodology, market and timeframe.

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