I think that auto-merge should only merge (the oldest) deals once the Max open deals per pair is reached into the next oldest deal to free the configured amount of spaces for further deals as I described it above. The merged deals get cancelled, there funds are virtually added according to the deals’ average price virtually. Only whether the settings of the target deal would be an important point to consider. Because it should be mentioned, that the price of the target deal won’t move closer to the current price but away from it, similarly to what would happen for DCA steps on the winning side of a deal where the take profit price is moving away from the current price.
Of course, we could overcome this possibly counter intuitive price movement of the target deal if we change the target. If the oldest deal becomes the target and the newer deals get merged into it, the target deal’s average price will move into the direction of the current price and lower the required change to take profit.
And another restriction might be if the deals that are meant to be merged still have open DCA steps. What shall happen then?