Exit stocks only when the exit criteria is met

Jeswin-Joy-30818

And avoid exits through rebalancing frequency

Ak-22422

sharpelyAdmin

Hi Jeswin,

Could you help us understand this in more detail.

On rebalancing, basically your entry signal is run and all stocks that qualify based on your entry signal and position sizing are bought. To free up the capital to buy stocks, our system simulates a sell of stocks that do not qualify the entry signal and are in your portfolio.

If we do not sell the stocks, we might not have enough capital to buy all stocks in the entry signal.

Let us know how exactly would you like the strategy to behave at the time of entry? A concrete example would be very helpful. If we still have doubts, someone from out team will get on a call with you to understand this better.

Jeswin-Joy-30818

sharpelyAdmin I will give an example. Let’s say my entry is below 30 p/e and exit is above 60 p/e, then I want to be in the trade when pe is 40 and 50. But the current system exits me out during entry

sharpelyAdmin

Hi,

In the same example, suppose you start the strategy on 1st Jan 2025 and buy 10 stocks (equally weighted) where PE is less than 30. Your starting capital was 10 lac.

On your next entry (say on 1st Feb 2025), PE for 5 out of 10 stocks have moved above 30 and there are 5 new stocks where PE < 30. Suppose for 3 stocks, there has been exit. So you have roughly 3 lac of cash to buy new stocks.

On 1st Feb, entry model will throw up 7 stocks (out of which 2 already exists in your portfolio and 5 are new). How do you want to position size the capital of 3 lac on these 7 stocks?

Jeswin-Joy-30818

Hi, thank you for replying. What I am trying to understand is whether the 5 stocks that went above 30 PE ratio would get exited in the 1st Feb 2025 rebalance or not. I would want the exits to only happen when the exit condition is met and the entry conditions to check and enter new stocks using the capital freed up using exit signals.

sharpelyAdmin

Hi Jeswin,

Now your requirement is clear. We will have to add support for this in our strategy builder. We have started work on this and should be available by 15th Feb 2025.

Jeswin-Joy-30818

Thank you

sharpelyAdmin

Hi Jeswin,

This is now live. In the strategy builder, select “Use available margin to buy new stocks” as shown in the screenshot:

Do not forget to also specify an exit model or else the strategy will never have enough margin to take entires after the first trade.

Do test this and let us know your feedback.

Jeswin-Joy-30818

Thank you for the update.

Ak-22422

Can you please also add a configuration for entry position sizing to limit the number of stocks retained through rebalances?

In a 30-stock strategy, if one stock is exited on trigger, the next rebalance buys another 30 using the proceeds from the sale, increasing the total count to (30 - 1 + 30).

Ak-22422

@sharpelyAdmin ?