Position Lifecycle & Exit Logic

This page documents the lifecycle of trading positions within the feb_2026_strategy, covering the transition from signal generation to final closure. It details the three primary exit mechanisms: trailing take-profit, hard stop-loss, and sentiment-driven reversals.

Position Initialization

Positions are initialized via the getSignal function within the strategy schema. The system uses a "moonbag" configuration which sets up a position with a defined stop-loss but relies on dynamic logic for profit taking.

The Moonbag Pattern

The Position.moonbag utility creates a signal with:

• Position Direction: Derived from the POSITION_LABEL_MAP.
• Hard Stop-Loss: Set by the HARD_STOP constant (default 3.0%).
• Infinite Lifetime: The minuteEstimatedTime is set to Infinity, meaning the position will not expire due to time and must be closed by price action or logic.

Metadata and Notes

Every generated signal includes a note containing the LLM's reasoning and a link to the source news. This note is persisted with the trade record for auditability.

Exit Mechanisms

The strategy monitors active positions through the listenActivePing hook, which executes on every price tick for currently open trades.

1. Sentiment Flip (ListenActivePing)

The system continuously re-evaluates the market sentiment. If the LLM forecast changes its sentiment (e.g., from bullish to bearish), the strategy triggers an immediate market close.

• Logic: It resolves the current forecastSource and compares the new position recommendation against the data.position of the active trade.
• Execution: If a mismatch is detected, commitClosePending is called.
• Safety: If the new forecast is marked as not_reliable, the exit is suppressed.

2. Trailing Take-Profit

Instead of a fixed target price, the strategy uses a trailing mechanism to capture extended trends.

• Trigger: The position must first be in profit (currentProfit > 0).
• Threshold: The TRAILING_TAKE is set to 2.5%.
• Mechanism: The system calculates the distance from the highest profit peak reached during the trade's lifetime using getPositionHighestProfitDistancePnlPercentage. If the price retraces by more than the TRAILING_TAKE value from that peak, the position is closed.

3. Hard Stop-Loss

A safety net handled by the backtest-kit core engine.

• Value: 3.0% distance from entry.

• Priority: Stop-loss checks have priority over activation and other logic to ensure capital protection.

Technical Implementation Flow

The following diagram illustrates how the strategy logic interacts with the backtest-kit framework entities to manage the lifecycle.

Logic to Entity Mapping

Title: Strategy Logic to Code Entity Mapping * *

Signal State Transitions

The lifecycle follows a strict state machine managed by the framework.

State	Description	Transition Trigger
Idle	Waiting for signal	getSignal() returns non-null
Opened	Entry triggered	Automatic next-tick transition
Active	Monitoring exits	TP, SL, or commitClosePending
Closed	Terminal state	Exit logic completed

Exit Execution Flow

Title: Position Exit Execution Flow * *

Configuration Overrides

In specific test scenarios (e.g., feb_2026.test.ts), the exit logic can be modified via global configuration:

• CC_MAX_STOPLOSS_DISTANCE_PERCENT: Set to 100 (effectively disabled) in some backtests to allow logic-only exits.

• NEVER_HARD_STOP: A local constant used to simulate positions without stop-losses.