A guide to gradually adding money to your trading account and sizing positions across multiple systems. The speaker explains how to distribute new capital and adjust your position sizes as you add funds.
The question of how do I add and allocate new capital gradually? If I'm adding 500 bucks a month or a thousand bucks a month, how might you deal with that from a capital allocation perspective? The first thing is we're assuming that you've got a capital allocation, as in a certain percentage to each of however many systems you're trading. If you don't have that, that's a very high priority. Now, if you save a little bit of money and you then distribute that between each of your strategies, the capital allocated to the first strategy gets a little bit bigger, right? Then if you don't change any of your allocation, you don't add a new system or anything, you've just got a little more capital to trade that system with and every other system. Then when you do your position sizing for your next trade, what happens? It gets a little bit bigger. So if you're saving a relatively modest amount into your account, you can just drop it in at the top. It automatically flows through your capital allocation calculations. And when you get a new signal, it just sizes up the next trade just a little bit in proportion to your savings. So that's a really great approach when you're adding a small amount of money or you're happy with the allocation of systems that you've got and you don't want to add a new system. Sam.
