The position sizing bot determines your position size per trade at the start of each day. The bot looks at the current market price, the contract value and the expected volatility and range for that day relative to your risk-setting inputs. The bot will then calculate how many contracts Emini/Micro to trade per trade for that day (a new position size will be computed at the start of every new day). The User will set their initial capital input and the risk amount required per trade, e.g. 2%. On average, we expect two potential long/short correlated positions per day simultaneously, so your overall risk will be 2% + 2% = 4% if you are long or short two systems.
On very rare occasions, you can even have three long or short trades simultaneously, so in that case, you will have a combined 12% risk; Users should keep in mind that even though this seems like the risk is extensive on those very rare days, the correlated simultaneous trades in the same direction will never all have the same entry times and each trade will have different stops and targets, therefore, many of the correlated trades can be a mix of winners or losers – we do not expect all simultaneous long/short positions to achieve the same profit/loss for that day.
The position sizing bot will calculate the size at the start of each day for each market and places the same fixed size for each trade for their respective market on a single day, e.g. If the position sizing bot calculates based on user risk settings to trade 6 Micro contracts on the NQ, 8 Micro on the ES and 9 Micro on the YM then every NQ trade made that day will trade 6 Micro per trade, every ES trade will trade 9 Micro per trade and every YM trade will be 9 Micro per trade – the position sizing bot will not increase or decrease this daily calculated size just because a simultaneous same direction trade is being placed.