50 shades of stop loss, Part 1/2

Our Trading lifecycle and execution semantics milestone is now feature complete. Hey LiSA can express the full lifecycle of a trade: entry, sizing, protection, updates, and exit.

For this study, we designed six BTC strategies on the 4h chart. They all use Supertrend 10/3 as their entry signal: a bullish flip opens a long, and a bearish flip opens a short. Each trade risks 2% of the portfolio. An opposite flip closes any position still open.

Supertrend 10/3 on the BTC/USD four hour chart — *Supertrend 10/3 on BTC/USD four hour candles.*

Each strategy is tested over the same six-month period.

A complete six-month BTC four-hour backtest with every trade visible — *A wider view of the strategy, with multiple trades visible.*

The six strategies differ only in how they manage an open position: fixed price, ATR, market structure, RSI invalidation, trailing ATR, or time. These are examples, not a complete list.

Each strategy starts as a natural-language instruction. We selected one clear trade from each backtest and zoomed in to show how Hey LiSA applies its rules candle by candle.

1. Fixed price protection

Trade BTC on 4h using Supertrend 10/3 for entries. Risk 2% of the portfolio per trade. Place the stop 2% from entry and use a 1:2 risk to reward ratio.

An isolated BTC long trade between a fixed stop and fixed target — *The stop and target stay fixed.*

2. Volatility based protection

Trade BTC on 4h using Supertrend 10/3 for entries. Risk 2% of the portfolio per trade. Place the stop 1.5 ATR from entry, using ATR(14) at entry, and use a 1:2 risk to reward ratio.

An isolated BTC short trade with its stop and target derived from ATR at entry — *ATR at entry sets both fixed levels.*

3. Market structure protection

Trade BTC on 4h using Supertrend 10/3 for entries. Risk 2% of the portfolio per trade. For longs, place the stop at the previous candle’s 20 candle Donchian low. For shorts, use the Donchian high. Target 1.5R.

An isolated BTC long trade using the lower Donchian channel as its stop loss — *The prior Donchian boundary becomes the stop.*

4. Condition invalidation exit

Trade BTC on 4h using Supertrend 10/3 for entries. Risk 2% of the portfolio per trade. Use a 2% emergency stop and a 2R target. Use RSI(14) as an exit indicator. Invalidate a long when RSI is 50 or lower, and a short when it is 50 or higher.

An isolated BTC long trade closing when RSI falls below neutral before its emergency stop is reached — *RSI invalidates the trade before the emergency stop is reached.*

5. Dynamic trailing protection

Trade BTC on 4h using Supertrend 10/3 for entries. Risk 2% of the portfolio per trade. Start with a 2 ATR stop, using ATR(14) at entry. Once the trade reaches 1.5R, trail the best price by 3 current ATR. The stop can only tighten.

An isolated BTC short trade activating and following an ATR trailing stop before a rebound closes it — *The trail activates after a favorable move, tightens, then catches the rebound.*

6. Time based exit

Trade BTC on 4h using Supertrend 10/3 for entries. Risk 2% of the portfolio per trade. Use a 2% emergency stop and a 2R target. Close the position if it is still open after 20 candles.

An isolated BTC short trade closing after 20 completed candles — *The timer closes the position after 20 completed candles.*

Part 2 combines several of these mechanisms in one NNFX based strategy: a two leg trade with TP1, TP2, and a trailing stop. It is a more complete example of what the engine can express in one approach.