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Step 4 — Quantity & Capital

Step 4 — Quantity & Capital

Wizard step

How much to trade. Four sizing modes, the capital they draw on, the leverage applied, and how capital is divided across entry sets.

Why sizing decides the outcome

Position sizing has more effect on a 's than the entry rule does. The entry decides whether you are ; the size decides how much it matters. Two traders running identical signals with different produce different businesses, and one of them can go broke while the signal is still working.

Sizing mode

FieldTypeDescription
mode*"fixed" | "percentOfCapital" | "riskBased" | "capitalPerPosition"How order quantity is derived from capital, risk tolerance and price.
SAME SIGNAL, SAME CAPITAL — FOUR SIZING MODESFixedqty = value100constant, ignores price and capital% of capitalqty = capital × pct / price150compounds as equity growsRisk-basedqty = capital × risk% / (entry − stop)62constant loss per tradeCapital / positionqty = allocation / price118equal-weight bookonly risk-based sizing holds the loss constant — the other three hold the position constant and let the loss vary
One signal, one capital base, four modes. Only risk-based sizing holds the loss per trade constant.
ModeTypeDescription
Fixed quantityqty = valueAn exact number of shares, lots or contracts, unchanged by price or capital. The simplest thing that works, and the default while you are still validating a signal.
% of capitalqty = capital × pct / priceSize tracks portfolio , so the compounds on the way up and de-risks on the way down automatically.
Risk-basedqty = capital × risk% / (entry − stop)Size is derived from the so that every trade risks the same amount. Requires a configured in the Exit step — without one there is no denominator.
Capital per positionqty = allocation / priceA cash per trade, producing an equal-weight book. With leverage the exceeds the allocation.
★
Pro tip:Risk-based sizing is the one worth understanding properly. It inverts the usual relationship: instead of choosing a size and accepting whatever loss the stop implies, you choose the loss and let the size fall out of it. A wide stop produces a position, a tight stop a large one, and the damage from being wrong is the same either way.

Fields

FieldTypeDefaultDescription
quantitynumber—For , units per trade. For % of capital, the — 5 meaning 5%.
capitalnumber—Total trading capital. The base for and risk-based calculations, and the starting equity for backtests.
leveragenumber1Multiplier for capital-per-position . 1 is unleveraged. Amplifies gains and losses equally.
maxPositionsnumber1Concurrent open positions allowed. For strategies this caps how many ladder levels can be at once.
!
Caution:Leverage does not change the probability of being , only the consequence of being wrong. A 5× position loses 5× as fast, and a margin call closes the position on the broker's terms rather than on your stop. Always pair leverage with a stop tight enough that the stop is reached first.

Strategy profile

A read-only summary derived from the Settings step, showing how the manages positions — single entry, grid, DCA or pyramid. If it does not say what you expected, the mismatch is in Settings, not here.

Entry allocations

With multiple entry sets, each can be given a share of total capital. The last set receives whatever remains, so the allocations always sum to 100% even if the numbers you typed do not.

FieldTypeDefaultDescription
entryAllocations{ entrySetId, percent }[]—Capital share per set. Should sum to 100%; the final set absorbs the residue.
multipleEntryModebooleanfalseEnables editing. When off, all capital belongs to a single entry set.
Capital split across three entry sets
total capital  10,00,000

┌───────────────────────────────────────────────────────────┐
│  entry set 1   RSI oversold        60%  =  6,00,000       │
│  ████████████████████████████████████░░░░░░░░░░░░░░░░░░   │
│                                                           │
│  entry set 2   MACD bull cross     25%  =  2,50,000       │
│  ███████████████░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░   │
│                                                           │
│  entry set 3   Bollinger bounce    15%  =  1,50,000       │
│  █████████░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░   │
│                                                           │
│  total                            100%  = 10,00,000       │
└───────────────────────────────────────────────────────────┘

with maxPositions = 3, all three can be open at once and full
exposure is 10,00,000; with maxPositions = 2 the third signal is
ignored until one of the open positions closes

Before moving on

  • Sizing mode matches how you actually think about risk
  • Starting out: fixed quantity, so the backtest is easy to reason about
  • Managing risk properly: risk-based, with a configured in Step 6
  • Capital set to the amount genuinely available to this
  • maxPositions set, so total exposure has a ceiling
  • allocations summing to 100% across the entry sets
  • If leverage is on: a tight enough to before margin does

See also

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