Exit long positions

• 05/13/2021 at 8:07 PM #169626
  Tutu

  Dears

  I am relatively new in using Prorealtime and I would like to optimize my trading strategy by automating my trades. I am looking for ways to reduce the losses related to the following scenario:

   

  Each time the price of a share is say >= $60 then buy 1 share ( cumulative orders is set to false in other words maximum is one long position) .

  Then each time the price is <= $60 sell the long position. The operation is again repeated if the price again is >= $60.

  Could you please suggest the best way to limit the potential losses by limiting the number of repeated orders that satisfy the condition ( when I backtested the scenario the number of orders was huge (thousands!) and so was the accumulated losses of the orders )

  Ultimately I am looking for the optimal way to exit the long position each time the price falls below the target price but reduce the number of orders to the minimum to keep the overall loss minimal while satisfying the condition.

  Thank you

   

   

   

   

  

  Tutu

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  05/14/2021 at 12:09 PM #169673
  robertogozzi

  If you buy when the price is >= $60 and exit when it’s <= $60 you will almost always lose (or exit at breakeven if you’re lucky) !

  Don’t you have any target?

  You wrote “Ultimately I am looking for the optimal way to exit the long position each time the price falls below the target price but reduce the number of orders to the minimum to keep the overall loss minimal while satisfying the condition.  If the price falls below the target it’s because that price level has already been hit and your trade closed, isn’t it?  So why would you want to close a trade that doesn’t exit anymore?

   

   

   

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  Tutu

  

  robertogozzi

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  05/14/2021 at 4:30 PM #169702
  Tutu

  Hi Roberto,

  First of all thank you for your prompt reply.

  I apologize I have not put in context what I am trying to achieve, please allow me to add more context to my strategy:

  I would like to sell Crude oil ( WTI)  naked call , usually at the beginning of each new front month contract for instance:

  Sell 1 naked Call ( strike price 60) for say $1500. in order to protect the risk if the price trades beyond the strike price I want to systematically enter a long position to protect the naked call and exit the long position (which acts here as a hedge for the naked call), so in this case whenever price trades >= $60 enter a long position, whenever price trades <= $60 close the long position.

  I know crude oil is volatile and thought about automating the buy/sell long position in the hope this will reduce the cost of hedging the naked call ( instead of buying a call which is simply too prohibitive).

  In other words I am willing to accept a certain loss to protect the call. the question is actually how much will the cost be if I automate the strategy.

  When I back-tested the strategy I got mitigated results: in some instances the loss related to the hedge ( buy/sell the long position) was around $800 which is profitable ($1500  -$800 ), but I got also different result in other strike prices / other months ( 61,62,63,64 Feb/Mar/Apr…etc), I guess it depends on the price movement & volatility inherent to each period.

  So I am looking for ways to reduce as much as possible the loss related to the hedge (buy/sell the long position) by optimizing the code.

  I personally think my strategy is simply flawed, may be I have to hedge differently than entering long and selling if the price drops.

  Thank you again for your help/input.

  Regards.

   

   

   

  

  Tutu

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  05/14/2021 at 4:46 PM #169705
  Tutu

  backtesting ( 1 tick) results in approximately 100 trades whenever the price crossed my target and as you mentioned resulted mostly losing trades ($800). I am not taking into account the speared requirement.

  

  Tutu

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  05/14/2021 at 10:37 PM #169719
  robertogozzi

  Now it’s clear for me that this is beyond my trading experience. I never traded options, nor did I do hedging, so I am afraid I can’t help you. Sorry.

  

  robertogozzi

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  08/20/2022 at 5:05 AM #199260
  UkDownUnder

  Regarding Exit of a long position, I’m also looking for this solution,

  for example, if trending long, I need to ExitLongPosition Only, “on my signal”  I do not want to Sell back into the market with a short.

  We have the option to exit a Short position with ExitShort. Without re-entering the market, do we not!

  Any ideas, Thanks

  

  UkDownUnder

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  08/20/2022 at 9:45 AM #199265
  GraHal

  Exit Long is ‘Sell’.

  Exit Short is ‘ExitShort’.

  I think you may be asking a question that above is not the answer to? 🙂

  

  GraHal

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  08/20/2022 at 8:38 PM #199291
  JS

  Hi @Tutu

  When using options, you need to have a vision about the market.

  You only sell naked calls when you expect a bearish market and/or volatility is high.

  I don’t think it’s a good idea to hedge your position that way because you’re only going to make a loss on your hedge.

  When you sell naked calls ATM (At The Money) you better counterbalance that with a purchased OTM (Out The Money) call. This is called a vertical spread or bear spread.

  The advantages of this bear spread are: you limit the risks and you have an excellent RR ratio, the disadvantage is that your profit is maximized (but that was already the case).

   

  

  JS

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