What is Emergency Close in the decision engine?

Emergency Close is a critical safety feature in MagicTradeBotโ€™s Intelligent Decision-Making Engine that automatically closes trades during extreme market movements to protect your capital. It acts like a โ€œpanic buttonโ€ when market conditions suddenly turn against your positions.

๐Ÿง  How It Works

  1. Activation

    • Controlled via the EmergencyClose flag in decision_engine.yaml:
EmergencyClose: false   # Set to true to enable automatic emergency trade closure

  • When enabled, all trades flagged for emergency closure are automatically closed when the market triggers the emergency conditions.

  • Emergency Threshold

    • Defined in market_watch.yaml using AverageMovementEmergencyClose:
AverageMovementEmergencyClose: 0.6  # % opposite movement to trigger emergency close

  • Example:

    • Crash scenario: Average movement of tracked symbols drops 0.6% downward, marking all long trades with emergency_close = true
    • Pump scenario: Average movement spikes upward by 0.6%, marking all short trades with emergency_close = true

  • Minimum Hold Time

    • To avoid prematurely closing recently opened trades, EmergencyCloseMinHoldTime ensures trades are only closed if they have been open longer than a defined duration:
EmergencyCloseMinHoldTime: 20  # minutes

  • Trades younger than this threshold are ignored, preventing unnecessary exits from short-lived volatility immediately after entry.

  • Execution Flow

    • Trade is flagged with emergency_close = true when the threshold is met
    • Decision engine checks the trade age
    • If age > EmergencyCloseMinHoldTime, the trade is closed immediately
    • If age < EmergencyCloseMinHoldTime, the trade remains open until the minimum time is reached

๐Ÿ”‘ Key Points

  • Purpose: Protects your account from rapid market crashes or pumps
  • Scope: Can close longs during crashes or shorts during pumps
  • Safety Mechanism: Minimum hold time prevents premature exits on recent trades
  • Automation: No manual intervention needed; the engine handles emergency closures 24/7

In short, Emergency Close is a proactive risk-management tool that ensures your positions are automatically exited during sharp market reversals, locking in profits or limiting losses without requiring constant monitoring.

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