Capital Allocation

so if my strategy has assets of $100k and i set my scaling at 20% that’s $20k. If the strategy usually buys positions that cost $15k and he buys 4, $15k is 25% of that order. I’m set at 20% and have $20k which is more than enough to buy 1 position but at 25% of the order it’s above my scale. Or is the scale strictly the total dollar amount the strategy holds? Do they buy a share for me?
Also, is there a formula for allocating for multiple strategies? I have noticed that very few of the strategies use 100% of their capital at any given time. With margin i have about $100k in buying power but I usually have my total allocation well above that being sure to make sure each strategy has enough to buy at least 1 share of the positions the strategy buys most but I miss out on a lot of buys and that’s been bad and good. My total allocation right now is $170k. I am trying to understand all of this better. Any help would be appreciated.

Scaling is applied to position size. If trade leader buys 1000 shares and your scaling is 25%, than you buy 250 shares.

Thank you JTIF, I did not know that and was ready to accept it as the gospel until I thought of this. When i declare a scale of 25% in that scenario and the strategy has $100k I am shown as having $25k of buying power. if they buy 2 shares at $10k per share, that $10k I clearly have covered but it’s now 50% of the position size. I’ve declared 25% is my maximum. Do i buy that share for $10k? Do I not know what position size means? jejejeje I cannot rule that out.

the position size is the number of shares or future contracts in the position. if you have 25% scaling and trade leader buy 2 shares, than you open position for 0.25 x 2 = 0.5 ~ 0 shares. price of the shares/contracts will matter only if you will try to to open position larger than your buying power. in this case your order will be rejected by the broker.

Thanks for taking the time for me. You’re a class act. Here’s an example of something i find confusing . FTSE MARKET TRADER strategy has $80k. He generally buys positions that are about 7.5k each and buys anywhere from 1 to 6 units per order. I’m thinking if i allocate $15k I’ll be included in a decent amount of trades of 1 to 2 units. $15k is 18.75% of $80k. If he buys 4 units, 2 units = $15k which is 50% of the order. I’m allocating $15k or 25%. I have the money for the shares. Do i get action?

not really. with the 25% scaling you will have zero position until he has 4 or more contracts. when this happen, c2 will sync accounts and you will get 1 contract. when he get back to three contracts, you highly likely get to zero position again. this is theoretical assumption based on c2 auto-trader and scaling logic i know.

roughly you will not have trades from 9/27, 9/16, 9/9, 9/3, 8/19, 8/11 and trade from the 7/15 will have different sequence compare to the trade leader.

on the other topic. hope you recognize that this is martingale-type strategy which have 100% winning rate and you know consequences of the trading of the such type strategies with high winning rates.

The information you just gave me should be part of the collective2 welcome packet. I’m just a pizza king with a walnut sized brain. I don’t think it should be required that I have a brain your size to use this system. jejeje Thanks a lot, i really appreciate this.

And no, I know nothing of the Martingale system. I just see this cat making money hand over fist with regularity.

Instead of trying multiple strategy at lower scale aka 25% or 50%, try to scale up to 100% one strategy. It will give you more advantage. eg. Some uses market timing and Dollar-Cost Averaging (DCA) than you would be in disadvantage.
Some strategies buy 4 and sell 1,2,34 for four different targets. You also loose most of the juice aka profit here.
Another example is when strategy buy 1,2,3,4 buying targets and sell on one target. You will still get very minimum upside.

Please feel free to reach us if you have any other questions and we will happy to help you.

We use use lot of complex variations and quant model and AI to run three different strategies. Please check it out.