How Should I Scale Patience is a Virtue

I get this question a lot so I am going to answer it here and then link to this in my description. I cannot give personalized investment advice here on collective2. But I can give general advice.

Let’s say you have $40,000 of capital that you want to copy the trades from Patience is a Virtue. Before starting autotrading I would go to the page for the strategy and pull the most recent equity value as shown in the photo below. Be sure to pull the value at the time you set up AutoTrading. Do not use the value in this post. In this example the current net liquidation value of the strategy is $142,235. Therefore, if I want to use the same amount of leverage and have the same amount of aggressiveness as the strategy I would simply take $40,000 divide it by $142,235 which is 0.281. Therefore, I would set my scaling to 28%.

I trade Patience is a Virtue, Opt 4 Patience, and Tax Your Patience like cash accounts. So if the NLV is $142,235 I may buy really aggressive stuff like UPRO, TNA, VXX, calls on SVXY etc. However, I won’t have my cash go below zero. I also don’t sell to open a position. Aka I don’t use margin. I use leverage via leveraged ETFs and Options, but I don’t use margin.

However, if someone wanted to juice my strategies or be more aggressive, they could in theory use leverage on top of my strategy. They could run their AutoTrade calculation as if they have $45,000 of purchasing power even if they only have a net liquidation value of $40,000 in their actual account. By doing so they would start buying things on margin. I DO NOT RECOMMEND THIS! In fact most people may benefit from taking less risk by running their AutoTrade with $30,000 even if they started with $40,000 cash. By taking less risk people tend to be more consistent which is key for long term success. Therefore, I recommend starting small.

Once you set up the AutoTrading you can then go into the AutoTrading control panel and adjust at anytime if you want to increase or decrease the weighting of the strategy. If you have further questions about how scaling works I would contact C2 or ask a question in the forums.