Equity Recalculation
How account equity changes affect Turtle-style Unit sizing, risk budgets and position management.
Position size depends on account equity. When equity changes, future Unit calculations should change too.
After gains
If the account grows, the formula may produce larger Units. This can compound returns, but it can also increase drawdown size. The system should define how often equity is updated.
After losses
If the account shrinks, Unit size should usually shrink as well. This helps reduce risk after drawdowns and prevents a losing period from becoming too large relative to current capital.
Practical choices
Common approaches include recalculating daily, weekly, monthly or after closed equity changes. The important point is consistency. Changing the recalculation schedule after a loss is another form of rule drift.