Position Sizing and Risk

How Execute determines position size using a 3-tier config matrix, risk-based math, and per-account independence.

Execute determines how many lots to trade before every entry. This page covers the 3-tier configuration matrix, sizing modes, risk formulas, R-multiple calculation, and how sizing works across multiple accounts.

The 3-tier config matrix

Every sizing decision checks three tiers in priority order. The first tier with a non-zero value wins.

Tier 1 — Strategy-specific. Each strategy has its own size and risk columns in your AccountConfig sheet. For example, a strategy named SST reads from sst_size and sst_risk. If these have values, they control sizing for that strategy.

Tier 2 — Asset class. If Tier 1 has no value, the engine falls back to asset-class columns: stock_fut_size, index_opt_risk, commodity_fut_size, and so on. The correct column is selected by matching the instrument's asset class (stock, index, commodity) and type (futures, options).

Tier 3 — Global fallback. If neither strategy nor asset class has a value, the engine reads defaultStockSize — a catch-all for any instrument not covered by the tiers above.

This matrix lives in your Google Sheet. You control it. Execute reads it at signal time.

Sizing modes

Fixed lots

When your size value is below 1,000, it is treated as a lot count.

size = 5, lot_size = 50
→ lots = 5, quantity = 250

Set sst_size = 3 and every SST trade enters with 3 lots, regardless of risk or margin.

Risk-based sizing

When you set a risk value (e.g., sst_risk = 500), the engine calculates how many lots fit within that risk budget.

Risk per lot formula:

risk_per_lot = |entry_price - sl_price| × multiplier × lot_size

• entry_price — the price at entry
• sl_price — the initial Stop Loss (SL)
• multiplier — contract multiplier (1 for most instruments)
• lot_size — units per lot (e.g., 100 for US stock options, 50 for ES futures)

Lot count:

lots = floor(account_risk / risk_per_lot)

Example: you buy AAPL call options at $185 with SL at $180. US options lot size is 100.

risk_per_lot = |185 - 180| × 1 × 100 = $500
account_risk = $2,000
lots = floor(2000 / 500) = 4
quantity = 4 × 100 = 400

Capital-based sizing

When your size value is 1,000 or above and no risk value is set, it is treated as a capital allocation. The engine divides your capital by margin per lot.

size = 50000, margin_per_lot = 12000
→ lots = floor(50000 / 12000) = 4

Capping rule

When both risk and capital constraints are specified, the tighter constraint wins. If risk math says 6 lots but capital only supports 4, you get 4 lots.

R-multiple calculation

The R-multiple measures how far price has moved relative to your initial risk. It applies to both long and short trades.

For long trades:

R-multiple = (current_price - entry_price) / (entry_price - initial_sl)

Example: entry at $185, SL at $180, current price at $195.

R = (195 - 185) / (185 - 180) = 10 / 5 = +2R

For short trades:

R-multiple = (entry_price - current_price) / (initial_sl - entry_price)

Example: entry at $185, SL at $190, current price at $175.

R = (185 - 175) / (190 - 185) = 10 / 5 = +2R

In both cases, 1R of risk means the trade has moved one unit of initial risk in your favor. A trade at -1R has hit the initial SL level. R-multiples are used by Trade Manager's R-Trail feature to move SL at profit milestones.

See Trade Manager for how R-Trail uses these milestones to adjust SL.

Per-account independence

Each account in your AccountConfig is sized independently. Account A might have sst_risk = 500 while Account B has sst_risk = 2000. When a signal fires, the engine runs the sizing formula separately for each account. Account A gets fewer lots. Account B gets more. The same signal, different position sizes.

This independence extends to margin checks. If Account A has insufficient margin, its order may be reduced or skipped while Account B executes at full size. No account's sizing affects another.

When sizing returns zero

The engine returns zero quantity (and skips the trade) in these cases:

• No config found. All three tiers returned zero — no size or risk is configured for this strategy/asset class.
• Duplicate entry. A position already exists for this instrument on this account. The engine suppresses duplicate entries by default.
• Insufficient risk budget. Risk per lot exceeds the account's risk allocation — even one lot costs more risk than allowed.
• Zero margin. Capital-based sizing with no margin data available.

When zero is returned, the reason is logged. Check your Telegram alerts for the specific skip reason.

When margin is insufficient

If the broker rejects your order due to insufficient margin after sizing, Order Intelligence takes over. It retries the order with one fewer lot, stepping down until the order fills or reaches one lot.

See Order Intelligence for margin step-down retry and freeze limit splitting.

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This is engineering infrastructure, not investment advice. All trading involves risk of loss.

Next steps

• See Trade Manager for how exits are managed after entry.
• See Order Intelligence for automatic safeguards during order execution.
• Need custom automation beyond built-in strategies? Talk to us.