Best decisions on how to close a position (based on TA) ʕ•́ᴥ•̀ʔっ

[campione]

Hiya,

Best TA based decisions to close a position in whatever timeframe what could be? And how a TA can understand a position can be closed? A logic, algorithm, decision making based on technicals that can lead to an outcome on closing a position?
Any complete algorithm, flowchart, UML diagrams that could make the decision on a complete logic to close a position that can survive Spike and limited spread widening, false reversal signs, and to manage the position that reached a {A} range of profit, do a logic A for making the decision on closing a position, if the position reach a {B} level of profit, do logic B and if the position reach {C} level of profit, execute logic C, etc etc

Can someone professional shed light on this also some advise how to convert these decisions to the TA based mechanical decisions(just on UML/Flowchart/Diagram/Algorithm) appreciated? To make it simple, I’m looking for a complete fail-safe UML/Flowchart/Diagram/Algorithm that can make this happen based on only TA based/calculable decisions? Everyone including @Clint @SystemX @PanchoVilla84 welcome;
You may draw here https://draw.io enter the website named draw.io and draw your algorithm and send the diagram here if you are interested?

Tnx and best of luck

[ponponwei]

That’s a lot of jargon there for a noob like me. Is this for an EA you’re trying to build?

[campione]

Thanks for the reply. If there is a definite solution, this can be TA based decision to close a position manually, also can be coded as AI/EA as well.

Tnx and best of luck

[ponponwei]

Ohhh I see. I’m pretty clueless when it comes to mechanical systems, I hope someone here can who’s more knowledgeable can chime in!

[tommor]

1. price moves in direction of trade more than 3ATR in 3 bars or fewer

2. 5 consecutive bars close higher for a long, lower for a short

3. price approaching significant support/resistance

[campione]

Thanks. A1) Do you mean ATR(period 3?), I don’t get this?
A2) I don’t get this either if the five consecutive candles close higher for long, price isn’t in momentum for the long? Why shall we close the position then?
A3) EA runs or in RT or Historical data, thus while trading lives, the normal implementable EA would have no idea of what happened in past periods that considered for S/R layers? Not unless more advanced methods apply and programming taken to actual mainstream programming IDE, I think implementation would be challenging and time-consuming. Whether this meets the conditions required effectively address the challenge is a different question? Is this the best possible approach?

I need to add this to the initial post, but the forum does not allow me to edit my post after a short while that post is submitted?! Thus I added it here:

Ideas shall be implementable with lowest possible calculations overhead, most crucial and effective method possible. Also survives in black swan events, high impact news events, spread widenings, spikes, temporary price movement toward general SL location when occurs but not limited to these events.

Tnx and best of luck

[tommor]

Hi.

A1 - I really mean a multiple (of your choice) of the ATR (of a period of your choice) in a period of your choice. It all depends on the strategy and a little on the particular market. The idea is that after an unusually fast strong price move in your favour, the position closes as this price move is so fast and so strong that it is likely to be followed by either extended consolidation or a deep pull-back: this could even of course become a reversal.

A2 - Again, fast and strong price movement unlikely to continue, so period depends on the market and time-frame. But for example, if GBP/USD has risen for 12 consecutive bars, is it really likely to continue through Bars 13, 14 and 15?

A3 - I included this for a more complete answer but clearly the trader would have to pre-set these.

[campione]

Hiya @tommor

1. Thanks. But there are about 1000 officially developed indicators/TA for the FX in various trading platforms, and there are about 1000+ unofficial versions of indicators that never developed as an official TA, but some may be useful if the developer and mathematical logic behind it are good enough. Selecting ATR over all of the available ones, but this indicator in a very high profile, but while analyzing on charts I personally didn’t see a clear exit by this indicator. While technically it can give clear exit signal, it shall/may give clear entry, but I couldn’t see by my personal analysis. It’s better that I find a char with clear entry and exit on the chart and I put my analysis on this ATR on that and compare it with other options we have. Then we can discuss on ATR’s possibility to be a choice in what accuracy percentage?

@tommor

The idea is that after an unusually fast strong price move in your favour, the position closes as this price move is so fast and so strong that it is likely to be followed by either extended consolidation or a deep pull-back: this could even of course become a reversal.

For what time frame? As per my knowledge and personal opinion in the charts, the reversal, pull back or consolidation does not happen in shorter time frames much?
The figure below shows the optimum entry and exit for a long trade:

There is ATR 30 and ATR 20 as indicators in one window but does not show any clear sign or entry and exit. I don’t see much of the signal as for me looks noise?
I’m looking for more accurate entry and exit by TA, while I can’t see them with ATR, unless there is a magical settings of it that I don’t know?

2. By ‘bar’ in your terminology are you referring to Renko-bars? And what time frame for this 13~15bar movement can be considered? And this is more a probability and that may be considered as part of TA based decision, logic, and algorithm for closing a position, but in my opinion, does not gives a clear exit signal? Also, it’s FX-pair specific, and shall be developed as an FX-based pair based EA/AI.
   Below is a figure of comparing Candlesticks to Renko-bar
   

   
   
   But this does not also give me any clear definite signal. Many buy>sell or sell>buy just causes much spread+commission payment to broker that shall be minimized, and this is not minimizing the spread+commission payments to broker much?

3. AI/EA can have as many as pre-set input that is needed and this can be implemented in the development process. Thus these kinds of methods, if helps the decision making, can be considered.

Tnx and best of luck

[campione]

Hiya @tommor

While ago we discussed in a separate thread to use soft-stop and use another position x-PIP lower/higher the current position to deal with stop-hunting by the broker and preventing artificial spikes created by the broker for stop-hunting. The black swan events that in less than a millisecond a candle with 100+ PIP length appears and increase in the same direction with upcoming candles, and create an event of candles that can remain for multiple days or weeks, while we use the x-PIP position placed higher/lower than the original position, will double our risk, as this only deal with spikes, and we don’t know when spikes coming and when Black swan events thus how shall we deal with this situation and if there is the solution for this, this also can be added to the final algorithm for the current thread discussion.

Tnx and best of luck

[campione]

I’m looking for the most polished optimum ideas for this concept. If you want to advise, you may test it on a definite entry and exit on the diagram/chart/candlesticks,… and if it helped anyway to decide an exit decision for an already open position, please do contribute your idea?
The idea’s that giving many false exits that cause use to pay again for opening another position in the same direction, isn’t that great as they just cause us to pay more spread+commission while this shall be avoided to reduce overall costs.

[tommor]

A1. The choice of ATR as an indicator is because its shows volatility and by implication what is probable price action in the same time range - e.g. if the average daily price range is 100 pips per day and suddenly your position moves 300 pips today, would you expect that tomorrow it will move 300 more pips in your direction? I would not so I would use this as an immediate exit signal. The choice of time-frame is dictated by your trading holding period.

A2. Bars just means candles / candlesticks in the time-frame dictated by your strategy. I’v never even used a Renko chart.

[campione]

Thanks. Regarding #1, I draw the entry and exit that can be favorable for me in the previous posts, and there was ATR on the chart with two different periods. Unfortunately, I’m unable to figure it out whether how is possible to ATR can help me see this entry and exit I mentioned in the chart in the previous posts also duplicate here:

For the average daily range, there is another indicator as well. Maybe if this is your choice to solve the defined issue. You may advise a solution in the chart for this 1H picture I mentioned in my research and I find this entry an acceptable one. As I think you are more favorite GBP/USD, thus this may be easier for you to advise on if we decide entry on 1H timeframe is 28th May and exit is 11th of the June, is the ATR or similar volatility or Day range based indicators can give us entry or exit? Also, my research is into the TA based method for exiting the trade that trade opened manually by the user and entry is not my favorite here, but if the defined solution can give entry signal, it’s positively optional?

For #2, For a timeframe, I’m looking at this TA based exit mechanism that can decide for trade that placed between 1Min and 1Hour trades.
Closing a trade shall be based on if actually a trend is reverted direction or it’s a small pullup/pulldown that is the nature of the movement if you know what I mean?

#4) Today’s FX market is going to range many times a month for FX major pairs and this TA based position closing strategy is intended for FX major pairs only. I expect we shall be able to define a solution that, if we enter a trade then market go to ranging, that these kinds of trades happened to me many times. I personally never able to know what to do, and I just exited trade based on luck as I can’t say if my entry as a high or low of the rang amount, then just keeping the position in hope of ranging will end, it’s not a good idea as Swap will affect my position.

#5) I shall say that if it’s possible to manage a large position with a 16% risk ratio regarding account size to position size and SL, assuming you know bout my calculations, that would be great?

#6) While ago we discussed in a separate thread to use soft-stop and use another position x-PIP lower/higher the current position to deal with stop-hunting by the broker and preventing artificial spikes created by the broker for stop-hunting. The black swan events that in less than a millisecond a candle with 100+ PIP length appears and increase in the same direction with upcoming candles, and create an event of candles that can remain for multiple days or weeks, while we use the x-PIP position placed higher/lower than the original position, will double our risk, as this only deal with spikes, and we don’t know when spikes coming and when Black swan events thus how shall we deal with this situation and if there is the solution for this, this also can be added to the final algorithm for the current thread discussion. ?

Tnx and best of luck

[campione]

To calculate SL or TP, this is the question?