Is it possible to set a stop loss based on the close of a candlestick?

[Ali_A]

Hello, i usually set a manual stop loss based on the close of a candlestick under a certain price. Do you know how i can automate this such that, instead of setting the stop order to trigger based on the underlying price ( which is currently in tos), the stop will only trigger if the candlestick closes below a certain price.

 

[Joshua]

Just for clarity, you're talking about a closed bar that is fully completed, correct? Is this for actual order submission, or just something like a strategy? I would need to know the aggregation(s) that you plan on using for sure. If it is for actual order submission, provide as much miscellaneous detail as you can, for example, that you might be trying to close an option based on the underlying's price, and things like that.

 

[Ali_A]

Just for clarity, you're talking about a closed bar that is fully completed, correct? Is this for actual order submission, or just something like a strategy? I would need to know the aggregation(s) that you plan on using for sure. If it is for actual order submission, provide as much miscellaneous detail as you can, for example, that you might be trying to close an option based on the underlying's price, and things like that.

Hello Joshua, yes for a closed bar and for an actual order submission. Example is; i buy an option contract, i set a conditional stop loss at the low of the trigger candle of the underlying. My question is, is it possible to set the stop loss such that it only triggers only if the candle closes below the stop loss rather than when the candle touches the stop loss? (Note: i usually set the stop loss based on the underlying price not option contract price)

 

[Joshua]

Yes, to a certain extent. ThinkScript has no proper way to detect the full completion of a bar, like a function, or an event handler. The typical method of doing so relies on the next bar opening. You would simply have to script the conditional as Close[1] < StopPrice. So, in the event that your stop is hit by a fully completed bar, It should trigger on the very first tick of the next bar.

This, of course, would run into issues on daily charts, and on the last intraday bar of the day, where it wont trigger until the next day. I can show you how to detect the final intraday bar of the day and arrange for an alternative method specific to that bar, if need be. You might want to have it revert back to the "touched" method on only that final bar, but It depends on how you want to handle it.