Adjustment Rules Overview

Adjustment Rules are Step 3 of the strategy creation process. They allow your strategy to dynamically manage open positions when market conditions change — acting as your autonomous risk manager that monitors, adapts, and repairs positions mid-flight.

Why Adjustments Matter

Without adjustments, a strategy can only enter and exit. But markets evolve constantly — a trade that was profitable 10 minutes ago might be under threat now. Adjustments give your strategy the ability to:

Hedge when risk metrics blow out
Roll positions to better strikes or expirations
Close underperforming legs early
Reverse direction when momentum shifts

The Trading Edge

This is how hedge funds trade. Instead of taking a full loss when a defined-risk spread is breached, they roll out the untested side in time or strike. This “portfolio surgery” dramatically prolongs survival rate in the market until the trend corrects. Algo Architech automates this process entirely.

How Adjustment Rules Work


Open Position (Active Legs)
        │
        ▼
┌──────────────────────┐
│  Monitor Conditions   │  ← Continuously evaluated on each candle/tick
│  (Indicators, Greeks, │
│   Historic Signals)   │
└──────────┬───────────┘
           │
     Condition Met?
           │
     YES   ▼
┌──────────────────────┐
│  Execute Action       │
│  • Close Position     │
│  • Close & Re-Enter   │
└──────────────────────┘

Configuration Components

Every adjustment rule has three parts:

1. Target Side

Which active positions should this adjustment monitor?

Target	What It Monitors
Buy Side	Only legs deployed from Buy signals
Sell Side	Only legs deployed from Sell signals
Neutral	All legs (for non-directional strategies)

2. Trigger Conditions

The conditions that must be met to fire the adjustment. Three trigger types are available:

Trigger Type	What It Monitors	Link
Indicator Value	Technical indicators (RSI, SMA, etc.) with consecutive bar confirmation	Greeks Triggers
Options Greeks	Real-time Delta, Gamma, Theta, Vega of the portfolio or individual legs	Greeks Triggers
Historic Signals	The pattern of recent strategy signals	Historic Signal Validation

3. Action Type

What happens when the trigger fires:

Action	Description	Link
Close Position	Liquidate targeted legs to cut risk	This page (below)
Close & Re-Enter	Close legs and immediately deploy new ones	Close & Re-Enter

Action: Close Position

The simpler of the two actions — when triggered, immediately close (liquidate) the targeted legs.

Close Options

Option	What It Closes
Close specific side	Only Buy-side legs, only Sell-side legs, or only Neutral legs
Close all	Liquidate the entire position

Use When: Risk has exceeded your tolerance and you want to cut exposure immediately without re-entering.

Action: Close & Re-Enter

The more powerful action — close the affected legs and immediately deploy new ones. This is the “rolling” mechanism that keeps your strategy alive.

→ Full details: Close & Re-Enter (Rolling)

Adjustment vs Entry vs Exit — What’s the Difference?

Component	When It Runs	What It Does
Entry Conditions	Before any position exists	Opens new positions
Adjustment Rules	While positions are open	Modifies/rolls/hedges existing positions
Exit Strategy	While positions are open	Closes positions for profit/loss (final exit)

Adjustments are the middle layer — they keep your strategy alive between entry and exit by proactively managing risk.

Consecutive Bar Confirmation

Adjustment triggers support consecutive bar confirmation — requiring the trigger condition to sustain for a specified number of bars before firing. This prevents adjustments from being triggered by momentary spikes.

Setting	Behavior
`Consecutive = 1`	Adjust immediately on first breach
`Consecutive = 3`	Condition must be true for 3 bars in a row before adjusting

Set consecutive bars ≥ 2 for volatile markets to avoid “over-adjusting” on momentary indicator spikes.

Next Steps

Learn about the most powerful adjustment trigger — Options Greeks monitoring:

→ Next: Greeks Triggers