Portfolio Allocation & Position Sizing

A TVT framework for sizing positions and managing cash across market conditions

Core Philosophy

Market conditions change — a tested, disciplined framework doesn't.

MAX POSITION SIZE10% — high conviction only

SPECULATIVE POSITIONSKept under 2–5%

STARTER POSITION1–3% of the portfolio

ADD INCREMENT1–2% per confirmation signal

BASE CASE ALLOCATION80–90% invested / 10–20% cash

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Maximum Position Size — 10%

No single position should exceed 10% of the total portfolio
High-conviction plays backed by strong fundamentals and technicals can go up to 10%
More speculative positions are kept under 2–5% to manage downside risk

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Position Sizing: Entry & Adding

Starter Positions

Typically 1–3% of the portfolio, depending on conviction level and market volatility

Adding to Positions

I typically add in increments of 1–2% when confirmation signals align — for example, a Wave 2, a key level flipping to support, or price breaking above the top of Wave 1.

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Cash vs. Invested Capital %

Maintaining flexibility is crucial, and I adjust my cash reserves based on market conditions:

BASE CASE80–90% invested / 10–20% cash for opportunities

BULL MARKETS90–95% invested — little room for new opportunities

VOLATILE / UNCERTAIN MARKETS20–40% cash — currently where we are

BEAR MARKETS / CRASHES50%+ cash — capitalize on bottoming signals

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Final Thoughts

This disciplined approach ensures I balance risk management, flexibility, and opportunity seizing while protecting downside exposure. Market conditions change, but having a tested strategy will help you navigate any market.

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TVT Allocation Framework — Quick Reference

Max Position

10% (high conviction)

Starter Size

1–3%

Add Increment

1–2%

Cash Today

20–40% (volatile regime)

This content is for educational purposes only and reflects my personal perspective and experience using Elliott Wave Theory. It is not financial advice, investment advice, or a recommendation to buy or sell any security. All investing involves risk, and you are responsible for your own decisions. Always do your own research.