Paired Trade accounting (?)

April 9th, 2021, 03:59 PM

Newbish question...

Is there something a newb needs to know about how trades are paired for winners / losers? In my mind, it all comes out the same in the end, but here's what I'm questioning.

If I'm scalping a couple ticks, I enter long but the price goes down 2 ticks. So I enter a second position there and place my target two ticks above (at the entry price of my first position. Now if the price moves back up two ticks and I exit there, I should have a closed position that is up 2 ticks and an open position that is down two ticks -- right?

The reason I ask is I did this same scenarios with about four contracts, one at a time. My trade statement is showing me negative for what I thought was a positive. But I didn't screen record, so I can't prove it. Could be I'm just too old and the memory's going, or I fat-fingered something.

SBtrader82 · April 10th, 2021, 01:36 PM

You are right in your interpretation, normally the platforms assume that you sell first the first contract that you bought and later the second one. This is called FIFO (first in first out) policy, you can also set the platform to use a LIFO policy (last in first put). The result doesn't change.

Probably the mismatch that you see in the statements is due to the commissions and slippage, probably if you entered with market orders there is some slippage that you are not accounting for.

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Paired Trade accounting (?)

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Paired Trade accounting (?)