The backtest engine assumes you have better credit than Warren Buffet and will allow you to place as many orders as you wish. The funds to place any new long orders simply reduce the portfolio cash. The cash can (and often does) go negative which means one has 'borrowed' funds (ie dipped into margin or increased leverage). There is nothing preventing cash from going negative. The backtest engine will never 'automatically' exit positions**. It's up to the algo logic to keep leverage under control.
order_optimal_portfolio method can make ordering a bit easier. That order method will close out any positions which are not explicitly opened or held. It also handles the checking for
data.can_trade. I'd encourage using that with a
TargetWeights objective rather than
order_target_percent. Both work but a little more convenient to use
** The one situation where the backest engine will automatically exit a position is when a security is delisted. If one is holding a security and that security becomes delisted, the backtester will close the position and credit the account with the last known value of the security. This is similar to what a broker would do in real life.
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