Commerce Exit Automation Pt 2

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In this video, we continue to discuss the benefits of Automated Trade Exit Management Strategies. We show more complex strategies, such as having multiple targets and stops as well as using a mixed mode of automated and manual management for those active traders needing more refined control in managing their positions. We take a look at volume stop strategies and how to add more legs as we keep adding to our position (scale in). All these different exit strategies have one goal, to help you better manage your position.

 

 

If you missed part 1, please see HERE.

 

Notes:

Hi all,

In this video, we’ll continue to discuss trade exit strategies and we start with a variation of the multi-leg strategy discussed in part 1.

Multi-Leg Strategy

We tweaked the strategy by removing the trail option from it.

Having multiple stop orders, not being trailed automatically, for active traders, the ability to manually adjust those orders individually can be of the utmost importance for their trade management, especially when trading slower markets.
When trading faster markets though, trailing orders can be more effective in protecting our position from fast reversal moves.

We place our buy order, it gets executed, and now, we have not only 4 targets but also 4 stop orders.

Our first target gets executed, and we adjust one of the stop orders manually by clicking on the price where the order is and then clicking again at the entry price so that the order is moved to it. We have now one of our stops at breakeven.

We have still 2 stop orders down below that we should adjust, and instead of clicking on each order manually, we have a cool feature which is the S2P or (stop 2 price) and L2P (limit 2 price) buttons in the trade window, and what they do when activated is moved all orders we have, stop or limit, to one single price at the same time when we click on it.

The second target is executed, our breakeven stop is canceled, and we now adjust our last two stops also to breakeven.

We activate the S2P button, and when we click at our entry price, at 72 evens, see how both stop orders move to that price at the same time.

The market continues to move in our way, executing our last target.

StopLimit Strategy

In this next example, we’ll be looking at a stoplimit strategy.

We changed the stop type to a stoplimit order and enabled the offset option by setting it up to 3 ticks.

We place our sell order, and it gets executed.

Our stop limit order is placed at 65.50, prices start to go against us and our order gets executed.

Volume Stop Strategy

Let’s now talk about volume stop strategies.

In this example, we have enabled the volume stop option by setting it up to 20 lots.

We place our buy order, it gets executed, and our volume stop is placed at 02.50, where we have 106 lots waiting to be executed.

For this order to be triggered 2 things need to happen. 1st we need the market to trade the 02.50 as the inside bid and 2nd that bid needs to be equal to or lower than 20 lots, which means if that bid at 02.50 never drops below 21 lots while trading as the inside bid, that volume stop will never trigger.

In this case, as the market comes against our position, as the bid gets cleared, our volume stop triggers, becoming a market order and getting executed at the first available price.

 Add to Position Strategy

In the last example, we’ll show how we can add a strategy, or more legs, to our position.

The strategy used is very similar to our multi-leg strategy, in fact, the only difference is the number of legs and the quantity traded.

We place our sell order which is executed. We sold 2 lots, which is the default quantity of our strategy.

We have our initial 2 stop orders and 2 targets.

The third leg of the strategy has an asterisk set as the quantity. This will allow us to add more legs to our position as we scale in. The quantity used will be the one set on the trade window, which will be 2 lots.

As the market moves our way, we add to our position by selling 2 more lots and notice how we just added a third stop order and target.

Our first target gets executed, we sell another 2 lots, another stop, and target are added, and since we have the S2P button enabled, when we clicked on the 25 evens price, all 3 stop orders move automatically to it.

We then have our second target executed and a couple of minutes later our third and fourth targets get executed also closing this way our position.

 Summary

In summary, our strategies are very simple and straightforward. Our goal is always to offer tools that are simple to work with and with only the essential options available.

 

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