diff --git a/freqtrade/optimize/backtesting.py b/freqtrade/optimize/backtesting.py
index cf499d4e2..6c5d098dc 100644
--- a/freqtrade/optimize/backtesting.py
+++ b/freqtrade/optimize/backtesting.py
@@ -429,7 +429,7 @@ class Backtesting:
             # - (Expected abs profit - open_rate - open_fee) / (fee_close -1)
             roi_rate = trade.open_rate * roi / leverage
             open_fee_rate = side_1 * trade.open_rate * (1 + side_1 * trade.fee_open)
-            close_rate = -side_1 * (roi_rate + open_fee_rate) / (trade.fee_close - side_1 * 1)
+            close_rate = -(roi_rate + open_fee_rate) / (trade.fee_close - side_1 * 1)
             if is_short:
                 is_new_roi = sell_row[OPEN_IDX] < close_rate
             else:
@@ -542,7 +542,10 @@ class Backtesting:
                         proposed_rate=closerate, current_profit=current_profit)
                     # We can't place orders lower than current low.
                     # freqtrade does not support this in live, and the order would fill immediately
-                    closerate = max(closerate, sell_row[LOW_IDX])
+                    if trade.is_short:
+                        closerate = min(closerate, sell_row[HIGH_IDX])
+                    else:
+                        closerate = max(closerate, sell_row[LOW_IDX])
             # Confirm trade exit:
             time_in_force = self.strategy.order_time_in_force['exit']
 
diff --git a/freqtrade/strategy/interface.py b/freqtrade/strategy/interface.py
index 975e9d41f..3fddc98df 100644
--- a/freqtrade/strategy/interface.py
+++ b/freqtrade/strategy/interface.py
@@ -869,7 +869,7 @@ class IStrategy(ABC, HyperStrategyMixin):
                                               force_stoploss=force_stoploss, low=low, high=high)
 
         # Set current rate to high for backtesting sell
-        current_rate = high or rate
+        current_rate = (low if trade.is_short else high) or rate
         current_profit = trade.calc_profit_ratio(current_rate)
 
         # if enter signal and ignore_roi is set, we don't need to evaluate min_roi.
@@ -961,9 +961,9 @@ class IStrategy(ABC, HyperStrategyMixin):
             else:
                 logger.warning("CustomStoploss function did not return valid stoploss")
 
-        sl_lower_long = (trade.stop_loss < (low or current_rate) and not trade.is_short)
-        sl_higher_short = (trade.stop_loss > (high or current_rate) and trade.is_short)
-        if self.trailing_stop and (sl_lower_long or sl_higher_short):
+        sl_lower_short = (trade.stop_loss < (low or current_rate) and not trade.is_short)
+        sl_higher_long = (trade.stop_loss > (high or current_rate) and trade.is_short)
+        if self.trailing_stop and (sl_lower_short or sl_higher_long):
             # trailing stoploss handling
             sl_offset = self.trailing_stop_positive_offset
 
@@ -981,12 +981,12 @@ class IStrategy(ABC, HyperStrategyMixin):
 
                 trade.adjust_stop_loss(bound or current_rate, stop_loss_value)
 
-        sl_higher_short = (trade.stop_loss >= (low or current_rate) and not trade.is_short)
-        sl_lower_long = ((trade.stop_loss <= (high or current_rate) and trade.is_short))
+        sl_higher_long = (trade.stop_loss >= (low or current_rate) and not trade.is_short)
+        sl_lower_short = (trade.stop_loss <= (high or current_rate) and trade.is_short)
         # evaluate if the stoploss was hit if stoploss is not on exchange
         # in Dry-Run, this handles stoploss logic as well, as the logic will not be different to
         # regular stoploss handling.
-        if ((sl_higher_short or sl_lower_long) and
+        if ((sl_higher_long or sl_lower_short) and
                 (not self.order_types.get('stoploss_on_exchange') or self.config['dry_run'])):
 
             sell_type = SellType.STOP_LOSS
diff --git a/tests/optimize/__init__.py b/tests/optimize/__init__.py
index 29b7fd210..43ad6ecd8 100644
--- a/tests/optimize/__init__.py
+++ b/tests/optimize/__init__.py
@@ -19,6 +19,7 @@ class BTrade(NamedTuple):
     open_tick: int
     close_tick: int
     enter_tag: Optional[str] = None
+    is_short: bool = False
 
 
 class BTContainer(NamedTuple):
diff --git a/tests/optimize/test_backtest_detail.py b/tests/optimize/test_backtest_detail.py
index a8260af49..7ede1adc3 100644
--- a/tests/optimize/test_backtest_detail.py
+++ b/tests/optimize/test_backtest_detail.py
@@ -361,6 +361,23 @@ tc22 = BTContainer(data=[
     trades=[BTrade(sell_reason=SellType.ROI, open_tick=1, close_tick=2)]
 )
 
+
+# Test 22s: trailing_stop Raises in candle 2 - but ROI applies at the same time.
+# applying a positive trailing stop of 3% - ROI should apply before trailing stop.
+# stop-loss: 10%, ROI: 4%, stoploss adjusted candle 2
+tc22s = BTContainer(data=[
+    # D   O     H     L     C    V    EL XL ES Xs  BT
+    [0, 5000, 5050, 4950, 5000, 6172, 0, 0, 1, 0],
+    [1, 5000, 5050, 4900, 4900, 6172, 0, 0, 0, 0],
+    [2, 4900, 4900, 4749, 4900, 6172, 0, 0, 0, 0],
+    [3, 4850, 5050, 4650, 4750, 6172, 0, 0, 0, 0],
+    [4, 4750, 4950, 4350, 4750, 6172, 0, 0, 0, 0]],
+    stop_loss=-0.10, roi={"0": 0.04}, profit_perc=0.04, trailing_stop=True,
+    trailing_only_offset_is_reached=True, trailing_stop_positive_offset=0.05,
+    trailing_stop_positive=0.03,
+    trades=[BTrade(sell_reason=SellType.ROI, open_tick=1, close_tick=2, is_short=True)]
+)
+
 # Test 23: trailing_stop Raises in candle 2 (does not trigger)
 # applying a positive trailing stop of 3% since stop_positive_offset is reached.
 # ROI is changed after this to 4%, dropping ROI below trailing_stop_positive, causing a sell
@@ -410,6 +427,39 @@ tc25 = BTContainer(data=[
     trades=[BTrade(sell_reason=SellType.SELL_SIGNAL, open_tick=1, close_tick=4)]
 )
 
+# Test 25l: (copy of test25 with leverage)
+# Sell with signal sell in candle 3 (stoploss also triggers on this candle)
+# Stoploss at 1%.
+# Sell-signal wins over stoploss
+tc25l = BTContainer(data=[
+    # D   O     H     L     C    V    EL XL ES Xs  BT
+    [0, 5000, 5025, 4975, 4987, 6172, 1, 0],
+    [1, 5000, 5025, 4975, 4987, 6172, 0, 0],  # enter trade (signal on last candle)
+    [2, 4987, 5012, 4986, 4986, 6172, 0, 0],
+    [3, 5010, 5010, 4986, 5010, 6172, 0, 1],
+    [4, 5010, 5010, 4855, 4995, 6172, 0, 0],  # Triggers stoploss + sellsignal acted on
+    [5, 4995, 4995, 4950, 4950, 6172, 0, 0]],
+    stop_loss=-0.05, roi={"0": 1}, profit_perc=0.002 * 5.0, use_sell_signal=True,
+    leverage=5.0,
+    trades=[BTrade(sell_reason=SellType.SELL_SIGNAL, open_tick=1, close_tick=4)]
+)
+
+# Test 25s: (copy of test25 with leverage and as short)
+# Sell with signal sell in candle 3 (stoploss also triggers on this candle)
+# Stoploss at 1%.
+# Sell-signal wins over stoploss
+tc25s = BTContainer(data=[
+    # D   O     H     L     C    V    EL XL ES Xs  BT
+    [0, 5000, 5025, 4975, 4987, 6172, 0, 0, 1, 0],
+    [1, 5000, 5025, 4975, 4987, 6172, 0, 0, 0, 0],  # enter trade (signal on last candle)
+    [2, 4987, 5012, 4986, 4986, 6172, 0, 0, 0, 0],
+    [3, 5010, 5010, 4986, 5010, 6172, 0, 0, 0, 1],
+    [4, 4990, 5010, 4855, 4995, 6172, 0, 0, 0, 0],  # Triggers stoploss + sellsignal acted on
+    [5, 4995, 4995, 4950, 4950, 6172, 0, 0, 0, 0]],
+    stop_loss=-0.05, roi={"0": 1}, profit_perc=0.002 * 5.0, use_sell_signal=True,
+    leverage=5.0,
+    trades=[BTrade(sell_reason=SellType.SELL_SIGNAL, open_tick=1, close_tick=4, is_short=True)]
+)
 # Test 26: Sell with signal sell in candle 3 (ROI at signal candle)
 # Stoploss at 10% (irrelevant), ROI at 5% (will trigger)
 # Sell-signal wins over stoploss
@@ -456,6 +506,25 @@ tc28 = BTContainer(data=[
     trades=[BTrade(sell_reason=SellType.TRAILING_STOP_LOSS, open_tick=1, close_tick=3)]
 )
 
+# Test 28s: trailing_stop should raise so candle 3 causes a stoploss
+# Same case than tc11 - but candle 3 "gaps down" - the stoploss will be above the candle,
+# therefore "open" will be used
+# stop-loss: 10%, ROI: 10% (should not apply), stoploss adjusted candle 2
+tc28s = BTContainer(data=[
+    # D   O     H     L     C    V    EL XL ES Xs  BT
+    [0, 5000, 5050, 4950, 5000, 6172, 0, 0, 1, 0],
+    [1, 5000, 5050, 4890, 4890, 6172, 0, 0, 0, 0],
+    [2, 4890, 4890, 4749, 4890, 6172, 0, 0, 0, 0],
+    [3, 5150, 5350, 4950, 4950, 6172, 0, 0, 0, 0],
+    [4, 4750, 4950, 4350, 4750, 6172, 0, 0, 0, 0]],
+    stop_loss=-0.10, roi={"0": 0.10}, profit_perc=-0.03, trailing_stop=True,
+    trailing_only_offset_is_reached=True, trailing_stop_positive_offset=0.05,
+    trailing_stop_positive=0.03,
+    trades=[
+        BTrade(sell_reason=SellType.TRAILING_STOP_LOSS, open_tick=1, close_tick=3, is_short=True)
+    ]
+)
+
 # Test 29: trailing_stop should be triggered by low of next candle, without adjusting stoploss using
 # high of stoploss candle.
 # stop-loss: 10%, ROI: 10% (should not apply)
@@ -534,6 +603,27 @@ tc33 = BTContainer(data=[
         enter_tag='buy_signal_01'
     )]
 )
+# Test 33s: trailing_stop should be triggered immediately on trade open candle.
+# copy of Test33 using shorts.
+# stop-loss: 1%, ROI: 10% (should not apply)
+tc33s = BTContainer(data=[
+    # D   O     H     L     C    V    EL XL ES Xs  BT
+    [0, 5000, 5050, 4950, 5000, 6172, 0, 0, 1, 0, 'short_signal_01'],
+    [1, 5000, 5049, 4500, 5000, 6172, 0, 0, 0, 0, None],    # enter trade and stop
+    [2, 4900, 5250, 4500, 5100, 6172, 0, 0, 0, 0, None],
+    [3, 5100, 5100, 4650, 4750, 6172, 0, 0, 0, 0, None],
+    [4, 4750, 4950, 4350, 4750, 6172, 0, 0, 0, 0, None]],
+    stop_loss=-0.01, roi={"0": 0.10}, profit_perc=-0.01, trailing_stop=True,
+    trailing_only_offset_is_reached=True, trailing_stop_positive_offset=0.02,
+    trailing_stop_positive=0.01, use_custom_stoploss=True,
+    trades=[BTrade(
+        sell_reason=SellType.TRAILING_STOP_LOSS,
+        open_tick=1,
+        close_tick=1,
+        enter_tag='short_signal_01',
+        is_short=True,
+    )]
+)
 
 # Test 34: Custom-entry-price below all candles should timeout - so no trade happens.
 tc34 = BTContainer(data=[
@@ -558,7 +648,21 @@ tc35 = BTContainer(data=[
     stop_loss=-0.01, roi={"0": 0.10}, profit_perc=-0.01,
     custom_entry_price=7200, trades=[
         BTrade(sell_reason=SellType.STOP_LOSS, open_tick=1, close_tick=1)
-]
+])
+
+# Test 35s: Custom-entry-price above all candles should have rate adjusted to "entry candle high"
+tc35s = BTContainer(data=[
+    # D   O     H     L     C    V    EL XL ES Xs  BT
+    [0, 5000, 5050, 4950, 5000, 6172, 0, 0, 1, 0],
+    [1, 5000, 5500, 4951, 5000, 6172, 0, 0, 0, 0],    # Timeout
+    [2, 4900, 5250, 4500, 5100, 6172, 0, 0, 0, 0],
+    [3, 5100, 5100, 4650, 4750, 6172, 0, 0, 0, 0],
+    [4, 4750, 4950, 4350, 4750, 6172, 0, 0, 0, 0]],
+    stop_loss=-0.01, roi={"0": 0.10}, profit_perc=-0.01,
+    custom_entry_price=4000,
+    trades=[
+        BTrade(sell_reason=SellType.STOP_LOSS, open_tick=1, close_tick=1, is_short=True)
+    ]
 )
 
 # Test 36: Custom-entry-price around candle low
@@ -613,7 +717,7 @@ tc39 = BTContainer(data=[
     # D   O     H     L     C    V    EL XL ES Xs  BT
     [0, 5000, 5050, 4950, 5000, 6172, 1, 0],
     [1, 5000, 5500, 4951, 5000, 6172, 0, 0],
-    [2, 4900, 5250, 4900, 5100, 6172, 0, 1],  # exit - but timeout
+    [2, 4950, 5250, 4900, 5100, 6172, 0, 1],  # exit - entry timeout
     [3, 5100, 5100, 4950, 4950, 6172, 0, 0],
     [4, 5000, 5100, 4950, 4950, 6172, 0, 0]],
     stop_loss=-0.10, roi={"0": 0.10}, profit_perc=0.0,
@@ -622,21 +726,32 @@ tc39 = BTContainer(data=[
     trades=[BTrade(sell_reason=SellType.FORCE_SELL, open_tick=1, close_tick=4)]
 )
 
-# Test 40: (copy of test25 with leverage)
-# Sell with signal sell in candle 3 (stoploss also triggers on this candle)
-# Stoploss at 1%.
-# Sell-signal wins over stoploss
+# Test 39: Custom short exit price above below candles
+# causes sell signal timeout
+tc39a = BTContainer(data=[
+    # D   O     H     L     C    V    EL XL ES Xs  BT
+    [0, 5000, 5050, 4950, 5000, 6172, 0, 0, 1, 0],
+    [1, 5000, 5000, 4951, 5000, 6172, 0, 0, 0, 0],
+    [2, 4910, 5150, 4910, 5100, 6172, 0, 0, 0, 1],  # exit - entry timeout
+    [3, 5100, 5100, 4950, 4950, 6172, 0, 0, 0, 0],
+    [4, 5000, 5100, 4950, 4950, 6172, 0, 0, 0, 0]],
+    stop_loss=-0.10, roi={"0": 0.10}, profit_perc=0.0,
+    use_sell_signal=True,
+    custom_exit_price=4700,
+    trades=[BTrade(sell_reason=SellType.FORCE_SELL, open_tick=1, close_tick=4, is_short=True)]
+)
+
+# Test 40: Colliding long and short signal
 tc40 = BTContainer(data=[
     # D   O     H     L     C    V    EL XL ES Xs  BT
-    [0, 5000, 5025, 4975, 4987, 6172, 1, 0],
-    [1, 5000, 5025, 4975, 4987, 6172, 0, 0],  # enter trade (signal on last candle)
-    [2, 4987, 5012, 4986, 4986, 6172, 0, 0],
-    [3, 5010, 5010, 4986, 5010, 6172, 0, 1],
-    [4, 5010, 5010, 4855, 4995, 6172, 0, 0],  # Triggers stoploss + sellsignal acted on
-    [5, 4995, 4995, 4950, 4950, 6172, 0, 0]],
-    stop_loss=-0.05, roi={"0": 1}, profit_perc=0.002 * 5.0, use_sell_signal=True,
-    leverage=5.0,
-    trades=[BTrade(sell_reason=SellType.SELL_SIGNAL, open_tick=1, close_tick=4)]
+    [0, 5000, 5050, 4950, 5000, 6172, 1, 0, 1, 0],
+    [1, 5000, 5500, 4951, 5000, 6172, 0, 0, 0, 0],
+    [2, 4900, 5250, 4900, 5100, 6172, 0, 0, 0, 0],
+    [3, 5100, 5100, 4950, 4950, 6172, 0, 0, 0, 0],
+    [4, 5000, 5100, 4950, 4950, 6172, 0, 0, 0, 0]],
+    stop_loss=-0.10, roi={"0": 0.10}, profit_perc=0.0,
+    use_sell_signal=True,
+    trades=[]
 )
 
 
@@ -664,25 +779,31 @@ TESTS = [
     tc20,
     tc21,
     tc22,
+    tc22s,
     tc23,
     tc24,
     tc25,
+    tc25l,
+    tc25s,
     tc26,
     tc27,
     tc28,
+    tc28s,
     tc29,
     tc30,
     tc31,
     tc32,
     tc33,
+    tc33s,
     tc34,
     tc35,
+    tc35s,
     tc36,
     tc37,
     tc38,
     tc39,
+    tc39a,
     tc40,
-    # TODO-lev: Add tests for short here
 ]
 
 
@@ -709,11 +830,10 @@ def test_backtest_results(default_conf, fee, mocker, caplog, data) -> None:
     patch_exchange(mocker)
     frame = _build_backtest_dataframe(data.data)
     backtesting = Backtesting(default_conf)
+    # TODO: Should we initialize this properly??
+    backtesting._can_short = True
     backtesting._set_strategy(backtesting.strategylist[0])
     backtesting.required_startup = 0
-    if data.leverage > 1.0:
-        # TODO: Should we initialize this properly??
-        backtesting._can_short = True
     backtesting.strategy.advise_entry = lambda a, m: frame
     backtesting.strategy.advise_exit = lambda a, m: frame
     if data.custom_entry_price:
@@ -740,8 +860,9 @@ def test_backtest_results(default_conf, fee, mocker, caplog, data) -> None:
     assert round(results["profit_ratio"].sum(), 3) == round(data.profit_perc, 3)
 
     for c, trade in enumerate(data.trades):
-        res = results.iloc[c]
+        res: BTrade = results.iloc[c]
         assert res.sell_reason == trade.sell_reason.value
         assert res.enter_tag == trade.enter_tag
         assert res.open_date == _get_frame_time_from_offset(trade.open_tick)
         assert res.close_date == _get_frame_time_from_offset(trade.close_tick)
+        assert res.is_short == trade.is_short