# How We Bet, Part V: Exits

We design our exits with a tool called the Dutch Tree, a.k.a. The Fahy-Biederman Exit Method for Common Stocks. See here: https://www.fahy.co/fahy-biederman-exit-method-for-common-stocks/

It’s the next-to-last step of our process and perhaps the most important, aside from timing.

Let’s briefly review how we got here with a few bullet points:

• Handicap Stocks = Fundamental Analysis – Bias (You’ll see plenty of examples of this throughout the blog, and what bias exists at this stage is largely exorcised by the Odds Engine.)
• Calculate Odds + Probabilities of Winning & Losing = Odds Engine*
• Place Bets = Fractional Kelly Bets (((P*W-L)/P)/8) across a host of handicapped stocks.** + Timing = Hurst-Hull Value Betting Ratings
• Develop Exit Strategy = Dutch Tree + Timing = Hurst-Hull Value Betting Ratings

What is the Dutch Tree?

The Dutch Tree is a quantitative tool that enables us to distribute risk across stock bets + outcomes with favorable odds.

The Dutch tree utilizes the decimal odds generated by our Odds Engine algorithm to produce the exact number of shares that one must liquidate at various predetermined price points in order to maximize profit while minimizing risk.

*A Special Note: Odds for all instruments are automatically calculated at the close of the last trading day of the year. By ‘calculate’ we don’t mean to imply that we are working with floating odds. Rather, we work with ‘Final Odds’ in parimutuel parlance.

**P = Payout | W = Probability of Winning | L = Probability of Losing