Green-to-Red Positions Exit Tactic
Overview​
The idea behind this tactic is to catch head fakes, in which a breakout is attempted, but quickly reverses. It tries to catch the exit early, as opposed to waiting until a later exit tactic flattens. This exit will follow the position price, and once the position price has reached an activation level (in % from entry price), if it retraces to a certain percentage, it will exit.
Parameters​
right direction pct: How much the current price is above the first average fill price that we receive. If long and your first average fill price is 1, and this is set to 5%, we will only begin tracking the retrace pct once your position hits 1.05 (5%).
retrace pct: What percent the position must fall back to before selling. Let's say you're long and your first average fill price is 1, and right direction pct is set to 5%. Once the position hits 1.05, this pct will come in to play. Let's say the retrace is set to 1%. If the position price falls back to 1.01, we will flatten.
Example​
Let's say you enter a long option position in AAPL, and you decide that if the position price increases by 5% and then begins to fall back, you want to exit early, rather than waiting for your lower stop loss to get hit. This is one way to prevent a winning trade from becoming a loser.