This is a must-have tool for properly executing a system with pyramiding (scale-in) rules on a portfolio of instruments in portfolio simulation mode. Without this PosSizer, Wealth-Lab's real-world simulation rules can skip the initial entry signal due to insufficient funds, but your system will be entering pyramided trades like nothing happened. This PosSizer will skip all additional entry signals if the initial trade has not been taken.
Figure 1a. Dialog
Figure 1b. Reverse Incremental option active.
This feature requires that your entry signal name (i.e., the Position.SignalName property) is not empty. Type in the initial entry signal into the corresponding field. Note: AutoComplete
feature is supported, suggesting you the most likely entry signal name from the list of signals generated by the system you're applying the PosSizer to.
As with most other PosSizers, the basic position size can be determined using either fixed dollar, percent of equity, or maximum risk percentage approach. You have the option to set the size of a pyramid (additional) trade as a percentage of the basis size, and to define the maximum number of allowed pyramid entries (that overrides your system rules).
The shape of the pyramid
The following four pyramiding scenarios are possible with the PosSizer:
- (Figure 2) Adding equal positions. Each new entry is simply allocated the same percentage (expressed as a percentage of the pyramid "base" i.e. the first trade before scaling in starts).
- (Figure 3) Upright (scaled-down) pyramid. When the "upright pyramid" checkbox is enabled, the pyramid shape changes considerably: each new entry is one half of the previous size (rounded down).
- (Figure 4) Reverse pyramid is the upside down version of an upright pyramid where the risk doubles with each new added trade
- (Figure 5) Reverse Incremental pyramid is an advanced version of adding equal positions. The risk grows progressively by the specified percentage. It's in between adding equal positions and the (much riskier) reverse pyramid.
Figure 2. Upright (scaled down) pyramid
Figure 3. Equal positions, pyramid trade = 50% of base size
Figure 4. Reverse pyramid
Figure 5. Reverse Incremental pyramid, base = 10%, pyramid increment = 10%