Cat Cushion Position Sizing

This strategy is for people who don’t want to guess position size every time.
It looks at how volatile the market is and then tells you how many units to hold so your risk per trade stays roughly the same – whether the chart is calm or crazy.

What it does

• Measures how “shaky” the price is day by day (volatility)
  
• Blends recent volatility with a long-term average so it doesn’t overreact to one weird day
  
• Uses your Risk per Trade (%) setting to calculate how big your position should be
  
• Adds a buffer zone so it doesn’t trade every tiny wiggle and burn commissions
  
• Shows a small performance table on the chart:
  • Average annual return (from backtest)
  • Sharpe ratio
  • Average drawdown per trade
  • Current position size as % of equity
  

How it thinks about risk

• When the market is calmer → volatility is lower → position size can be bigger
  
• When the market is wild → volatility is higher → position size becomes smaller
  
• You control the “spiciness” with:
  • Risk per Trade (%) – how much of your equity you’re willing to risk on each position
  • Change Sensitivity (%) – wider buffer = fewer trades, lower costs; tighter buffer = more frequent rebalancing
  

Good use cases

• Index ETFs (e.g. SPY , ACWI ) or other liquid instruments
  
• People who:
  • Already have a direction/idea (bullish on the index long term)
  • Want the position sizing to adapt automatically with volatility
  • Prefer “set the rules, let it run” rather than staring at the screen
  

Inputs to pay attention to

• Risk per Trade (%)
  • Conservative: ~1–2%
  • Balanced: ~3–4%
  • Aggressive: 5%+ (handle with care)
  

Important notes

• This is a position sizing / risk strategy, not a magical “always win” tool
  
• Works best when combined with:
  • A clear idea of what you want to trade (e.g. broad index ETFs)
  • A realistic risk profile (don’t just max the risk because the backtest looks better)
  
• Backtest results are not a promise of future returns
  
• Educational use only – this is not financial advice. Please test on your own, tweak to your comfort level, and don’t bet the rent money 😉
  

If you like systematic, “low-drama” investing (and want to spend more time chilling like a cat 🐱), this script helps the math side stay under control in the background.