The exit is part of the setup.

The publicly described framework

In his widely shared three-setups article, Kullamägi outlines a simple exit structure for breakouts: sell roughly one third to one half of the position after three to five days, move the stop on the remainder to break even, then trail what is left with the 10- or 20-day moving average. Which average he uses depends on how fast the stock is moving, and the same article suggests beginners stick to the 10-day.

The trail is based on a closing price. As written, the remaining shares are exited on the first daily close below the chosen average, not on an intraday touch. For episodic pivots, the same article mentions trailing with the 10-, 20- or 50-day average and encourages readers to build their own sell rules.

Why partial sales and a trail work together

The two parts do different jobs. The partial sale after a few days banks some profit while the move is fresh and pays for moving the stop to break even. The trail keeps the rest of the position open long enough to take part in the larger moves that make a low win rate workable.

Without the partial, a strong move that reverses can turn a winner into a loss. Without the trail, the occasional large trend gets cut short, and the large winners are what pay for the frequent small losses.

Choosing between the 10-day and the 20-day

A fast stock that surfs the 10-day average can drift far above the 20-day, so a 20-day trail gives back much more open profit before it triggers. A slower, steadier trend may dip under the 10-day often without ending, so a 10-day trail exits too early.

• Note which average the stock respected during its consolidation.
• Measure how far price sits above each average when the partial is taken.
• Decide the trail at entry or at the partial, not after a scary day.
• Write down the choice so it can be reviewed against the outcome.

What "the first close below" means in practice

A closing rule ignores intraday shakeouts, but it also means the exit price can sit well below the average if a stock falls hard late in the session or gaps down the next morning. Decide in advance whether you act near the close or at the next open, and record which one you actually used.

Testing your own sell rules

The episodic pivot article makes the broader point that every claim about a setup should be checked against your own study. Exit rules are a good place to start, because the same set of historical entries can be replayed with different exits.

1. Collect entries from your chart database, including failures.
2. Apply version one: partial after three days, 10-day close trail.
3. Apply version two: partial after five days, 20-day close trail.
4. Compare average R per trade, the largest giveback and the time held.
5. Split results by market regime and by how fast the stock was moving.

Look for the version you would actually follow, not only the one with the best total. A rule that looks best on paper but that you abandon after two painful givebacks is not the better rule.

The trade management check

1. Initial stop defined before entry.
2. Partial-sale window and size written down.
3. Break-even move planned for after the partial.
4. Trailing average chosen, with the reason recorded.
5. Close versus next-open exit decided in advance.
6. Outcome logged against the plan, including any deviation.