Need Advice on rebalancing
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Hello @Definedge users and @@Definedge-Experts @Brijesh-Bhatia
I am often confused about the momentify rebalancing. For suppose if my rebalancing date is 10th of every month so, will exit on last 15 minutes on rebalancing day but funds are available on the next trading day to buy again. So there is a mismatch between the backtesting and real strategies. So, when will be the best time to buy after rebalancing? I know it’s impossible to
Match virtual strategies but sometimes there is a huge rise in the stocks. So, how can we eliminate this and time to buy to next trading day ?Thank you
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@Manigopal Vutla
I believe there may be some gaps in your understanding of the process.The exit criteria are evaluated based on the End-of-Day (EOD) status, not during market hours. The same logic applies to rebalancing decisions as well.
On the rebalancing day, you are required to open the basket view, where the outgoing and incoming stocks—along with their respective quantities—are displayed in two separate tables. Upon clicking the “Execute” button, the outgoing stocks are first sent to the exchange for sale at the prevailing market price. Once the sales are processed, the incoming stocks are sent for purchase, also at the prevailing market price.
There should be no undue concern about minor price fluctuations, as these shares are being acquired for investment purposes. Moreover, when “Volar” is used as the ranking criterion, the probability of significant price volatility is relatively low.
You have also raised a point regarding fund availability. Please note that when executing trades through the Momentify rebalancing window, the system permits same-day sale and purchase transactions. This facility is available within the rebalancing process, even though such same-day transactions may not ordinarily be permitted outside this framework.
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@Rajendra Manke Thanks for the Valuable information. It helped me to understand the how system process.