Position Management and Closing
This document covers the position monitoring, early closure detection, and P&L-based decision making components of the Signal trading system. The CloseOutline service continuously monitors open positions and makes intelligent decisions about whether to hold or close positions based on real-time P&L dynamics, technical analysis, and historical patterns.
This page focuses specifically on the post-entry phase of trading. For information about position entry and signal generation, see Signal Generation and Validation. For broader risk assessment across market conditions, see Risk Assessment.
CloseOutline Architecture
The CloseOutline system operates as the second stage in the three-stage AI decision pipeline, specializing in position management after entry. It continuously monitors open positions and evaluates whether to maintain or close them based on sophisticated P&L analysis.
Core CloseOutline Flow
Key Service Components
| Service | Responsibility | File Location |
|---|---|---|
CloseOutline |
AI decision making for position closure | src/logic/outline/close.outline.ts |
CloseAutoService |
Automated position monitoring scheduler | Referenced in architecture |
CloseValidationService |
Risk-adjusted close decision validation | src/lib/signal/services/validation/CloseValidationService.ts |
ClosePromptService |
Prompt management for AI interactions | DI container registration |
BacktestDbService |
Position state and P&L history tracking | Referenced in consolidation system |
Position Monitoring System
The position monitoring system tracks multiple dimensions of position performance to make informed closure decisions.
P&L Analysis Components
Breakeven Analysis Logic
The system performs comprehensive breakeven analysis considering trading commissions and position performance:
P&L Analysis and Decision Logic
The CloseOutline AI uses sophisticated prompt engineering to analyze position dynamics and make closure decisions based on professional trading intuition.
Decision Criteria Framework
The system applies two primary decision paths based on P&L behavior:
Hold Position Criteria
- P&L demonstrates stable or ascending growth - positive dynamics or minimal drawdowns up to 0.2%
- Momentum shows stability or growth - P&L grows confidently, even with temporary drawdowns up to 0.15%
- Position approaches Take Profit or maintains growth potential based on original opening rationale
- Normal volatility - fluctuations up to 0.2% considered acceptable
- Technical indicators show trend continuation - signal agreement across most timeframes
Close Position Criteria
- Momentum consistently falling for 15+ minutes - P&L declining without recovery signs (drawdowns over 0.3%)
- Excessively high volatility - P&L experiencing uncontrolled fluctuations (over 0.3% from peak)
- Position losing progress toward Take Profit or steadily moving toward Stop Loss for 15+ minutes
- Sustained loss over 0.3% without recovery signs
- Technical indicators show clear trend reversal - sustained signal disagreement for 15+ minutes
AI Decision Processing
Adaptive TTL System
The CloseOutline employs an adaptive Time-To-Live (TTL) system that adjusts monitoring frequency based on current P&L dynamics, optimizing between responsiveness and resource usage.
TTL Configuration Matrix
| P&L State | TTL Duration | Rationale |
|---|---|---|
| PROFIT_RISING_TTL | 2.5 minutes | Moderate frequency when profit growing and price rising |
| PROFIT_FALLING_TTL | 1.0 minutes | High frequency when profit declining and price falling |
| LOSS_RISING_TTL | 5.0 minutes | Low frequency when loss shrinking and price rising |
| LOSS_FALLING_TTL | 5.0 minutes | Low frequency when loss growing and price falling |
Validation and Risk Management
The CloseValidationService provides an additional layer of risk management and validation before executing closure decisions.
CloseValidationService Features
Feature Flag Integration
The validation system integrates with the feature flag architecture to provide granular control over closure behavior:
| Feature Flag | Purpose |
|---|---|
isFeatureCloseBreakevenEnable |
Controls microtrading mode with exclusive early closure |
isFeatureCloseWithProfitEnable |
Enables early closure of profitable positions |
isFeatureCloseWithLossEnable |
Enables early closure of losing positions |
isFeatureCloseRiskFilterEnable |
Applies risk filter for market condition consideration |
Integration with Trading Pipeline
The position management system integrates seamlessly with the broader trading execution pipeline.
Complete Position Lifecycle
Database Integration
The system maintains comprehensive audit trails and historical data for analysis:
Real-world Examples
Example Position Analysis
The close.json file demonstrates a real CloseOutline analysis for an XRPUSDT position:
Position Details:
- Symbol: XRPUSDT
- Entry Price: 2.8922 USD
- Current Price: 2.8918 USD
- Take Profit: 2.916 USD (+0.8%)
- Stop Loss: 2.881 USD (-0.3%)
- Current P&L: -0.01% (-0.01 USD)
- Position Age: 4 minutes
P&L History Analysis:
| Price | P&L % | P&L USD | Breakeven | Time |
|---|---|---|---|---|
| 2.8922 | 0.00% | +0.00 | NO | 05:56:29 |
| 2.8943 | 0.07% | +0.07 | NO | 05:57:31 |
| 2.8952 | 0.10% | +0.10 | NO | 05:59:06 |
| 2.8937 | 0.05% | +0.05 | NO | 06:00:28 |
AI Decision: CLOSE
- Reasoning: "P&L demonstrates weak momentum — reached peak +0.10% but retreated to +0.05%, indicating loss of initial progress. Historical pattern analysis shows 9 out of 11 similar conditions led to early closure with minimal profit or loss."
Historical Pattern Analysis
The system analyzes historical trading outcomes to inform current decisions:
- Partial Profit Trades: 2 trades with early profitable exits
- Commission Loss Trades: 9 trades closed with minimal losses
- Stop Loss Trades: 0 trades reaching maximum loss
- Full Profit Trades: 0 trades reaching take profit targets
This pattern indicates the system's effectiveness in preventing large losses while capturing available profits through intelligent early closure detection.