Action Blocks - Tutorial

Overview

Action blocks execute trades when your conditions are met. These blocks place buy/sell orders, manage risk with bracket orders and trailing stops, and control order execution. Every profitable strategy needs well-designed action blocks to enter and exit positions at the right time.

Action: Buy

REQUIRED

Places a buy order for a specified symbol and quantity. Supports market orders, limit orders, and various sizing methods (shares, dollars, or portfolio percentage).

Order Types

Market Order: Execute immediately at current price
Limit Order: Execute only at specified price or better
Time in Force: Day, GTC (Good til canceled), IOC, FOK

Sizing Methods

Shares: Buy fixed number of shares
Dollars: Buy dollar amount worth of shares
Portfolio %: Buy percentage of portfolio value

📋 Example 1: Fixed Share Quantity

Strategy: Buy 100 shares when RSI is oversold

                  
                    source1 = Data: Ticker (AAPL, 1m)

                    rsi1 = Indicator: RSI (source1, length=14)

                    lt1 = Condition: A < B (rsi1, 30)

                    buy1 = Action: Buy (symbol=AAPL, 100 shares, Market, when=lt1)

📋 Example 2: Dollar-Based Sizing

Strategy: Buy $10,000 worth of shares on breakout

                  
                    source1 = Data: Ticker (TSLA, 1m)

                    sma1 = Indicator: SMA (source1, length=50)

                    gt1 = Condition: A > B (source1_price, sma1)

                    buy1 = Action: Buy (symbol=TSLA, cash=$10,000, Market, when=gt1)

📋 Example 3: Portfolio Percentage

Strategy: Allocate 20% of portfolio to position

                  
                    source1 = Data: Ticker (SPY, 1m)

                    sma1 = Indicator: SMA (source1, length=50)

                    gt1 = Condition: A > B (source1_price, sma1)

                    buy1 = Action: Buy (symbol=SPY, % Equity=20, Market, when=gt1)

💡 Best Practice: Use portfolio percentage for position sizing to automatically adjust position size as your account grows.

Action: Sell

REQUIRED

Places a sell order to exit existing positions. Supports full position exit or partial exit, market or limit orders, and profit/loss management.

Exit Methods

Sell All: Close entire position
Sell Shares: Close specific number of shares
Sell from Buy ID: Close everything tied to a specific buy block

When to Use

Profit targets reached
Stop loss triggered
Exit signal generated
Time-based exits

📋 Example 1: Profit Target Exit

Strategy: Sell when 10% profit is reached

                  
                    pos_qty1 = State: Position Qty (AAPL)

                    gt1 = Condition: A > B (pos_qty1, 0)

                    sell1 = Action: Sell (symbol=AAPL, sell_all_from=buy1, Limit, Limit % Above Last Buy=10, when=gt1)

📋 Example 2: Stop Price Exit

Strategy: Cut losses with a fixed stop price

                  
                    pos_qty1 = State: Position Qty (TSLA)

                    gt1 = Condition: A > B (pos_qty1, 0)

                    sell1 = Action: Sell (symbol=TSLA, Stop, stop_price=180, when=gt1)

📋 Example 3: Partial Exit (Scale Out)

Strategy: Take partial profits, let rest run

                  
                    source1 = Data: Ticker (AAPL, 1m)

                    rsi1 = Indicator: RSI (source1, length=14)

                    gt1 = Condition: A > B (rsi1, 70)

                    gt2 = Condition: A > B (rsi1, 80)

                    sell1 = Action: Sell (symbol=AAPL, qty=50, when=gt1)

                    sell2 = Action: Sell (sell_all_from=buy1, when=gt2)

⚠️ Important: Always have an exit strategy. Never enter a trade without knowing your profit target and stop loss levels.

Action: Bracket Order

ADVANCED

All-in-one order type that simultaneously places an entry order with both a profit target (take-profit) and stop loss. Perfect for set-and-forget risk management.

What it does

Places entry order (buy)
Automatically sets take-profit order
Automatically sets stop-loss order
Both exit orders placed as OCO (One-Cancels-Other)

When to use

Automated risk management
Set-and-forget strategies
Defined risk/reward ratio
When you can't monitor positions

📋 Example: 2:1 Risk/Reward Bracket

Strategy: Buy on breakout with automatic 5% stop and 10% target

                  
                    source1 = Data: Ticker (SPY, 1m)

                    gt1 = Condition: A > B (source1_price, 450)

                    bracket1 = Action: Bracket Order (symbol=SPY, qty=100, entry=Market,

                      take_profit_pct=10, stop_loss_pct=5, when=gt1)

✅ Benefit: Bracket orders remove emotion from exits. Your risk/reward is defined at entry, and both profit-taking and loss-cutting are automatic.

Action: Trailing Stop

DYNAMIC

Dynamic stop loss that follows price as it moves in your favor, locking in profits while giving the trade room to run. The stop "trails" behind the price by a set percentage or dollar amount.

How it works

Stop loss follows price up (for long positions)
Buy-side trailing stops can cover short positions (if your account allows shorts)
Never moves against the favorable trend
Triggers when price reverses by trail amount
Can be percentage or dollar-based

When to use

Trending markets (let winners run)
Momentum strategies
Uncertain profit targets
Capturing large moves

📋 Example: Momentum Trailing Stop

Strategy: Buy on momentum, use 5% trailing stop to ride the trend

                  
                    source1 = Data: Ticker (TSLA, 1m)

                    ema1 = Indicator: EMA (source1, length=20)

                    rsi1 = Indicator: RSI (source1, length=14)

                    gt1 = Condition: A > B (source1_price, ema1)

                    gt2 = Condition: A > B (rsi1, 60)

                    and1 = Condition: AND (gt1, gt2)

                    buy1 = Action: Buy (symbol=TSLA, cash=$10,000, Market, when=and1)

                    pos_qty1 = State: Position Qty (TSLA)

                    gt3 = Condition: A > B (pos_qty1, 0)

                    trail1 = Action: Trailing Stop (symbol=TSLA, sell_all_from=buy1, trail%=5, when=gt3)

📋 Example: Short Cover Trailing Stop

Strategy: If you already have a short position, cover with a 3% trailing stop

                  
                    source1 = Data: Ticker (TSLA, 1m)

                    pos_qty1 = State: Position Qty (TSLA)

                    lt1 = Condition: A < B (pos_qty1, 0)

                    trail_buy1 = Action: Trailing Stop (symbol=TSLA, trail%=3, when=lt1)

💡 Trail Amount: Common trail percentages: 3-5% for volatile stocks, 1-2% for stable stocks. Tighter trails capture profits faster but risk premature exits.

Short side: Use Action: Trailing Stop (Buy) to cover a short position when price rises by the trail amount.

Quick Reference

Action	Purpose	Best For	Risk Management
Buy	Enter long position	All entry strategies	Position sizing control
Sell	Exit long position	All exit strategies	Profit targets, stop losses
Bracket Order	Entry + TP + SL in one	Defined risk/reward	Automatic exits (both sides)
Trailing Stop (Buy/Sell)	Dynamic stop loss	Trending markets	Lock in profits as price moves favorably

Common Order Strategies

1. Simple Entry/Exit

                
                  source1 = Data: Ticker (SPY, 1m)

                  rsi1 = Indicator: RSI (source1, length=14)

                  lt1 = Condition: A < B (rsi1, 30)

                  gt1 = Condition: A > B (rsi1, 70)

                  buy1 = Action: Buy (cash=$10,000, when=lt1)

                  sell1 = Action: Sell (sell_all_from=buy1, when=gt1)

Basic strategy with indicator-based entry and exit thresholds

2. Bracket Order (Set and Forget)

                
                  source1 = Data: Ticker (SPY, 1m)

                  gt1 = Condition: A > B (source1_price, 450)

                  bracket1 = Action: Bracket Order (symbol=SPY, qty=100, entry=Market,

                    take_profit_pct=8, stop_loss_pct=4, when=gt1)

Fire-and-forget with automatic risk management

3. Trailing Stop (Trend Following)

                
                  source1 = Data: Ticker (SPY, 1m)

                  rsi1 = Indicator: RSI (source1, length=14)

                  gt1 = Condition: A > B (rsi1, 60)

                  buy1 = Action: Buy (cash=$10,000, when=gt1)

                  pos_qty1 = State: Position Qty (SPY)

                  gt2 = Condition: A > B (pos_qty1, 0)

                  trail1 = Action: Trailing Stop (symbol=SPY, sell_all_from=buy1, trail%=5, when=gt2)

Best for strong trends - maximizes profit potential

4. Scale Out (Partial Profits)

                
                  source1 = Data: Ticker (AAPL, 1m)

                  rsi1 = Indicator: RSI (source1, length=14)

                  lt1 = Condition: A < B (rsi1, 30)

                  gt1 = Condition: A > B (rsi1, 70)

                  gt2 = Condition: A > B (rsi1, 80)

                  gt3 = Condition: A > B (rsi1, 85)

                  buy1 = Action: Buy (symbol=AAPL, 200 shares, when=lt1)

                  sell1 = Action: Sell (symbol=AAPL, qty=50, when=gt1)

                  sell2 = Action: Sell (symbol=AAPL, qty=50, when=gt2)

                  sell3 = Action: Sell (sell_all_from=buy1, when=gt3)

Lock in profits incrementally while letting rest run

Best Practices

✅ Do:

Always define both profit target AND stop loss before entry
Use portfolio percentage for position sizing (scales with account)
Aim for risk/reward ratio of at least 1:2 (risk $1 to make $2)
Use bracket orders for automated risk management
Use trailing stops in strong trending markets
Test order execution in paper trading before going live

❌ Don't:

Enter trades without stop loss - NEVER risk entire account
Use fixed share quantities (doesn't scale with account growth)
Move stop losses further away when losing (hope is not a strategy)
Overtrade - quality over quantity
Ignore slippage on market orders (especially low liquidity stocks)
Risk more than 1-2% of portfolio per trade

📊 Position Sizing & Risk Management

Professional risk management guidelines:

Risk Level	Risk per Trade	Max Positions	Strategy Type
Conservative	0.5% - 1%	3-5	Long-term, low frequency
Moderate	1% - 2%	5-10	Swing trading, medium frequency
Aggressive	2% - 3%	10-15	Day trading, high frequency

💡 Rule: Never risk more than 2% of your account on a single trade. Professional traders typically risk 0.5-1% per trade.

⚡ Action Blocks Reference

Overview

Action: Buy

Order Types

Sizing Methods

📋 Example 1: Fixed Share Quantity

📋 Example 2: Dollar-Based Sizing

📋 Example 3: Portfolio Percentage

Action: Sell

Exit Methods

When to Use

📋 Example 1: Profit Target Exit

📋 Example 2: Stop Price Exit

📋 Example 3: Partial Exit (Scale Out)

Action: Bracket Order

What it does

When to use

📋 Example: 2:1 Risk/Reward Bracket

Action: Trailing Stop

How it works

When to use

📋 Example: Momentum Trailing Stop

📋 Example: Short Cover Trailing Stop

Quick Reference

Common Order Strategies

1. Simple Entry/Exit

2. Bracket Order (Set and Forget)

3. Trailing Stop (Trend Following)

4. Scale Out (Partial Profits)

Best Practices

✅ Do:

❌ Don't:

📊 Position Sizing & Risk Management