1. Scale-In Simple Position Sizing Algorithm
Justin Paolini
Scale-In Simple
Position Sizing
Algorithm

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3. Welcome! My name is Justin Paolini… Welcome to this video.
10+ years of experience trading FX
6 years of experience as an educator
Lecturer for the University of Ancona on Trading and Market Dynamics

4. What Position Sizing Does for You

5. Issue: Scarcity of Risk Capital

6. Benefits of Position Sizing Algorithms
Avoid the common mistakes that often put aspiring traders out of business.
Preserve Capital
Avoid Disaster
Maximize your profits

7. Avoid Incorrect Reasoning

8. Reality is Much Different

9. Reality is Much Different
Unrealistic
Martingale
High MaxDD
Lower Profit
Realistic
Scale-In-Simple
Lower MaxDD
Higher Profit

10. Plan for Extended Losing Streaks (they happen)

11. FXRenew’s Scale-In-Simple Algorithm
Be quick and easy to use.
Trade small at first. Capture profits. Only use the market’s money to build a larger position.
Keep your monthly risk within defined limits (Typically no more than a 3% maximum loss per month).
Have the flexibility to trade larger sizes based on the quality of the trade and the confidence level that the trader has in the position.

12. Scale-In-Simple Algorithm: Objectives
Designed to work in harmony with FXRenew’s London Open Signals
Targets 5% return per month, with limited downside (3%) and unlimited upside.
Teaches you how to risk a set % of your account per trade.
Allows for up to 6 trades at a time
Targets 8-20 trade opportunities per month
Usually Swing Trades, but also allows for short-term forays

13. FXRenew’s Scale-In-Simple Algorithm

14. Scale-In-Simple Algorithm: Tips & Tricks
For short-term trades, your standard position size can rise to 3 units.
For long-term trades your standard position size remains 1 unit (looking to scale-in to 10 units eventually).
If you have profits locked in for the month you can increase your position size. Using the above example, if you lock in $200 of profits you may add into the spreadsheet that you are now willing to risk $400 ($300 initial risk plus ½ of your accumulated profits). You would now have a maximum position size of $40,000. Therefore your new unit size would be $4000 or 0.4% of your account.
•You need to take into consideration your stop-loss distance when deciding on your position size. If you require more than a 100 pip stop you may need to trade a smaller size. Try not to risk more than 1% of your account on any one trade at a time.
If you are close to your maximum loss for the month, you may want to trade a smaller size, so that you don’t hit your maximum loss. It’s important to stay in the game.

15. Scale-In-Simple Algorithm: Drawdown Rules
If you hit your MaxDD (3%) but still wish to continue trading for the month, cut in half your position size and risk another 1.5% of your account. In total, you will be risking 4.5%
to make 5% on your initial capital during the month.

16. I Have Reached My 5% Target: Now What?
Keep Trading as normal
Cut your position size in half to protect your gains
Risk ½ your profits and swing for the fences
Stop trading for the month.

17. Scale-In-Simple Algo: Additional Notes
When you first start out, consider cutting your trade size by 50% for the first month in order to accumulate a profit and limit losses.
If you have profits from the previous month, you can start by trading a larger size.
Be Consistent! Don’t break the rules!

18. Justin Paolini www.fxrenew.com
Thank You
&
Good Luck! 18