How to Size Positions When Every Bot Has a Fixed Budget

Giving every automation its own budget answers the scariest question in automated trading: how much can this thing lose? No more than you gave it. But it leaves a second question open, and it’s the one that decides whether a strategy lives long enough to prove itself: how much of that budget should each trade use?

Put the whole budget into every trade and a strategy with a 60% win rate can still hit zero after a perfectly normal losing streak. Size too small and a good strategy spends a year making pocket change. Position sizing is the dial between those two, and it’s worth setting on purpose.

The budget is the account

In TradeFIQ each automation has its own capital. Everything your risk profile says about sizing is measured against that capital, not your exchange balance. “Risk 1% per trade” on an automation with $500 means $5 at risk, even if there’s $20,000 on the exchange.

Profits add to what remains and losses come off it, so sizing follows the automation’s actual results: after a good run it trades a little bigger, after a bad one a little smaller. That’s usually what you want.

Three ways to size a trade

The Position section of a risk profile offers three methods.

Fixed size uses the same amount every trade. It’s the easiest to reason about: with $500 and $50 per trade, you know exactly what’s on the line. It doesn’t adapt to where your stop is, so a trade with a wide stop risks more than one with a tight stop.

Fixed risk sizes each trade so that, if the stop-loss is hit, you lose a set share of the budget. A wide stop means a smaller position; a tight stop, a bigger one. This is what most professional traders mean by position sizing, because it keeps the loss per trade constant whatever the setup looks like.

Kelly sizes from the strategy’s edge (its win rate and the size of its wins versus losses). In theory it grows capital fastest; in practice it’s aggressive and very sensitive to overestimating your edge. If you use it, most traders use a fraction of it.

How big is “1%”?

A useful way to think about it is losing streaks. At 1% risk per trade, ten losses in a row costs about 10% of the budget. At 5%, the same streak costs around 40%, and you now need a 67% gain just to get back to where you started. Losing streaks of ten happen to perfectly decent strategies more often than intuition suggests.

A few rules of thumb traders often start from:

• New or untested strategy: 0.5% to 1% risk per trade.
• Strategy with a solid backtest and a few weeks of paper results: 1% to 2%.
• Anything above 3%: you’re making a bet on your backtest being right.

These aren’t magic numbers. They’re a starting point that keeps the experiment alive long enough to learn something.

Don’t forget concurrency

If an automation can hold several trades at once, each one reserves part of the budget. Five trades at 20% each is the whole budget in the market at the same time, and if they’re all on correlated coins, they tend to lose together. The Position section also lets you cap how many trades can run at once. Size per trade and the maximum number of open trades together decide how much of the budget is really exposed.

Leverage multiplies both sides

On futures, leverage lets a small budget control a bigger position. It doesn’t change what you can lose: the capital stop still closes a trade before the automation loses more than it has. What it changes is how quickly you get there. A move that would cost 2% unleveraged costs 10% at 5x. If you use leverage, lower the risk per trade to match.

A sensible setup

• Budget: the amount you’re genuinely fine losing on this idea.
• Sizing: fixed risk, about 1% per trade.
• Stop-loss: wide enough to survive normal noise for the pair (check its typical move with ATR).
• Max open trades: two or three.
• Leverage: none until the strategy has earned it.

Then run it on paper, watch a losing streak happen (one will), and check that the numbers you see are numbers you can live with. That’s the real test of a sizing plan: not the spreadsheet, but whether you leave the automation running when it’s down.