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Sorry if this seems like a noob question, but I've never done it before and am trying to put together a strategy that will scale in and out. Here's my question:
If I enter into 4 long positions at various times, each position is 5 contracts ES so after the fourth position, I am now 20 long; If I decide to close 10 of those contracts, do I have a choice of what I want to close, or are the oldest 10 contracts closed out? My gut tells me it's FIFO (First In First Out), but I want to know for sure. I'm hoping not, as that would be much easier to program. Thanks in advance.
Can you help answer these questions from other members on NexusFi?
OK, so you are saying that the exchange closes open positions on a FIFO basis, right? I understand the concept of FIFO, but am trying to confirm that the exchange works this way.
Although yes the exchange works like this most platforms will display the "average" of your positions.
So as you scale in and out your average will change depending on where your entries and exits are but it doesn't matter.
Why? Because if you treat each trade as separate then it's MUCH easier to manage.
It doesn't matter where you enter your first or fifth entry because your first exit will always be from your first open entry.
If you have five positions on... then take one off... then add one back on... you have now open and closed trade one. Trade two is now trade one and the process repeats.
I know that is first in first out but it's a small shift in perspective and I find it helps me keep track of my scaling.