Position Sizing

Where the quantity comes from

1. If the signal sends a quantity and the subscription's Position Size allows signal override, the signal's quantity (and quantityType) is used.
2. Otherwise the subscription's own Position Size method and value are used.
3. With neither, the quantity is 1.

Exits close the whole position unless the signal sends a smaller quantity. See Order Behavior.

EZPZ Trader doesn't check buying power. If an order is bigger than your account allows, the broker rejects it.

Methods

The entry price below is the limit price for a limit order, otherwise the signal's price, otherwise a quote at the subscription's market price type.

Fixed quantity

Trade exactly this many shares, contracts or coins.

{"ticker": "AAPL", "action": "buy", "quantityType": "fixed_quantity", "quantity": 25}

Dollar amount

quantity = dollar amount ÷ entry price

$1,000 at an entry of $100 = 10 shares.

{"ticker": "AAPL", "action": "buy", "quantityType": "dollar_amount", "quantity": 1000}

Percent of equity

quantity = (account equity × percent) ÷ entry price

A $50,000 account at 10%, entry $100: $5,000 ÷ $100 = 50 shares. Equity is your account value as the broker reports it.

{"ticker": "AAPL", "action": "buy", "quantityType": "percent_of_equity", "quantity": 10}

Risk dollar amount

quantity = risk ÷ (entry price − stop loss price)

Risk $100, entry $100, stop $90: $100 ÷ $10 = 10 shares. If the stop is hit, you lose about $100. This needs a stop loss.

{"ticker": "AAPL", "action": "buy", "signalPrice": 100, "quantityType": "risk_dollar_amount", "quantity": 100, "stopLoss": {"type": "stop", "stopPrice": 90}}

Risk percent

Like risk dollar amount, with the risk as a percent of equity. A $10,000 account risking 1% risks $100: entry $100, stop $90 → 10 shares.

{"ticker": "AAPL", "action": "buy", "signalPrice": 100, "quantityType": "risk_percent", "quantity": 1, "stopLoss": {"type": "stop", "stopPrice": 90}}

Percent of position

Signal only. Trades a percent of the position you already hold, usually to take partial profits.

{"ticker": "AAPL", "action": "exit", "quantityType": "percent_of_position", "quantity": 25}

Options and futures

• Options: one contract is 100 shares, so dollar, equity and risk methods divide by the price × 100.
• Futures: only fixed quantity works. The other methods are refused, because futures margin depends on the broker.

Signal quantity multiplier

Multiplies the signal's quantity: a signal for 2 with a multiplier of 2.5 trades 5. It's useful to follow a strategy at a bigger or smaller size than its author trades. It doesn't apply when the subscription's own Position Size is used.

Rounding

• With Allow fractional quantity off, quantities are rounded down to a whole number. A fixed quantity below 1 becomes 1; any other size that rounds down to 0 is skipped.
• With it on (stocks and crypto, on brokers that support it), quantities keep up to 6 decimals.
• Options and futures are always whole contracts.
• Every quantity is then fitted to the broker's own step, minimum and maximum order size.