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Square Off Action

What Is Square Off Action?​

The Square Off Action allows users to close positions for a specific trading element (e.g., an ATM Straddle), rather than closing all open positions in the action. This ensures that any trades tied to that particular strategy element are exited before new trades are executed.

How Square Off Action Works​

  1. A condition is evaluated.
  2. If the condition is true, the Square Off Action is triggered.
  3. The system automatically closes all open positions associated with the specified action (for example, an ATM Straddle).

Example Workflow​

  • Condition: “Current Candle Close crosses below 100 EMA”
  • Action 1: Square off the ATM Straddle positions

Why Use Square Off Action?​

  • Avoid Conflicting Trades:
    Ensures that positions for a particular trading element are exited before initiating new trades for that same action.

  • Targeted Risk Management:
    Allows you to close only the positions associated with the selected element, maintaining other active trades while managing risk on that particular strategy.

  • Strategy Rebalancing:
    Provides a quick reset for a specific component of your strategy without disrupting unrelated positions.

Next Steps​

  • Implement Square Off Action before initiating new trade actions on the same trading element.
    For example, square off the existing ATM Straddle before placing a new trade on that element.

  • Integrate with Technical Indicators:
    Combine the action with triggers such as EMA Crossover, RSI, or Bollinger Bands to determine optimal exit points for the selected positions.

  • Test Using Backtesting:
    Validate the impact of the Square Off Action on your trading strategy within a backtesting environment to ensure optimal timing and risk management.

Note:
The Square Off Action specifically targets positions of a selected element, unlike Square Off All Positions which closes every open position in the strategy.