trading_bot_v4/docs/guides/SYMBOL_SPECIFIC_SIZING.md

# Symbol-Specific Position Sizing Guide

## Overview

The bot now supports different position sizes and leverage for each trading symbol. This enables strategies like:

- **High-risk symbols (SOL):** $50 @ 10x leverage = $500 exposure (profit generation)
- **Low-risk symbols (ETH):** $1 @ 1x leverage = $1 exposure (data collection)

## Configuration

### 1. Market Configuration (`config/trading.ts`)

```typescript
export const SUPPORTED_MARKETS: Record<string, MarketConfig> = {
  'SOL-PERP': {
    driftMarketIndex: 0,
    pythFeedId: '0xef0d...',
    // Uses default config.positionSize and config.leverage
  },
  'ETH-PERP': {
    driftMarketIndex: 1,
    pythFeedId: '0xff61...',
    // OVERRIDE: Data collection mode with minimal risk
    positionSize: 1,    // $1 base size
    leverage: 1,        // 1x leverage = $1 total exposure
  },
  'BTC-PERP': {
    driftMarketIndex: 2,
    pythFeedId: '0xe62d...',
    // Uses default config.positionSize and config.leverage
  },
}
```

### 2. Helper Function

```typescript
export function getPositionSizeForSymbol(
  symbol: string,
  baseConfig: TradingConfig
): { size: number; leverage: number } {
  const marketConfig = SUPPORTED_MARKETS[symbol]
  if (!marketConfig) {
    throw new Error(`Unsupported symbol: ${symbol}`)
  }

  return {
    size: marketConfig.positionSize ?? baseConfig.positionSize,
    leverage: marketConfig.leverage ?? baseConfig.leverage,
  }
}
```

### 3. Execute Endpoint Integration

The `app/api/trading/execute/route.ts` endpoint now:

1. Normalizes symbol (ETHUSDT → ETH-PERP)
2. Gets merged config via `getMergedConfig()`
3. **Calls `getPositionSizeForSymbol(symbol, config)`** to get symbol-specific sizing
4. Uses returned `{ size, leverage }` for position calculation

## Example: ETH Data Collection Setup

### Goal
Collect as many ETH signals as possible with minimal risk to improve signal quality analysis.

### Configuration
```typescript
'ETH-PERP': {
  driftMarketIndex: 1,
  pythFeedId: '0xff61491a931112ddf1bd8147cd1b641375f79f5825126d665480874634fd0ace',
  positionSize: 1,    // $1 base size
  leverage: 1,        // No leverage
}
```

### Expected Behavior
- TradingView sends: `ETHUSDT LONG` or `ETHUSDT SHORT`
- Bot normalizes to: `ETH-PERP`
- Bot loads sizing: `positionSize: 1, leverage: 1`
- Position size: `$1 × 1 = $1 total exposure`
- At ETH = $3,500: Opens ~0.00029 ETH position
- Risk: Maximum loss = ~$1 (if emergency stop hits)

### Console Output
```
📊 Normalized symbol: ETHUSDT → ETH-PERP
📐 Symbol-specific sizing for ETH-PERP:
   Position size: $1
   Leverage: 1x
💰 Opening LONG position:
   Symbol: ETH-PERP
   Base size: $1
   Leverage: 1x
   Total position: $1
```

## Testing

### 1. SOL Trade (Default Sizing)
Send webhook:
```json
{
  "symbol": "SOLUSDT",
  "direction": "LONG"
}
```

Expected logs:
```
📐 Symbol-specific sizing for SOL-PERP:
   Position size: $50
   Leverage: 10x
   Total position: $500
```

### 2. ETH Trade (Override Sizing)
Send webhook:
```json
{
  "symbol": "ETHUSDT",
  "direction": "SHORT"
}
```

Expected logs:
```
📐 Symbol-specific sizing for ETH-PERP:
   Position size: $1
   Leverage: 1x
   Total position: $1
```

### 3. Verify in Drift
Check open positions - ETH position should show ~$1 notional value.

## Strategy Rationale

### Why $1 @ 1x for ETH?

1. **Data Collection Priority:** ETH shows 2-3x more signals than SOL
2. **Risk Management:** Cross margin means ETH position uses shared collateral
3. **No Profit Pressure:** Not trying to make money on ETH, just gather quality scores
4. **Statistical Significance:** Need 20-50 trades with quality scores before Phase 2
5. **Collateral Preservation:** Current SOL long uses most collateral, can't risk large ETH positions

### When to Increase ETH Sizing?

Only after:
- ✅ Phase 1 complete (20-50 trades with quality scores)
- ✅ ETH signal quality proven ≥ SOL (win rate, profit factor)
- ✅ Sufficient collateral available (not at risk of liquidation)
- ✅ Phase 2 ATR-based targets implemented and validated

## Cross Margin Considerations

**Critical:** All positions (SOL, ETH, BTC) share the same collateral pool on Drift.

### Collateral Math
```
Total Collateral: $500
Current SOL position: ~$450 used
Free collateral: ~$50

Adding ETH @ $1:
- Maintenance margin: ~$0.05 (5%)
- Initial margin: ~$0.10 (10%)
- Impact: Minimal ✅

Adding ETH @ $50:
- Maintenance margin: ~$2.50
- Initial margin: ~$5
- Risk: Higher liquidation risk ⚠️
```

### Safety Buffer
Keep at least 30% free collateral at all times:
- Total: $500
- Max used: $350 (70%)
- Reserve: $150 (30%) for margin calls and new positions

## Future Enhancements

### Phase 2: Reserve-Based Sizing Module

Create `lib/trading/position-sizing.ts`:

```typescript
export interface PositionSizingParams {
  symbol: string
  direction: 'long' | 'short'
  totalCollateral: number
  usedCollateral: number
  marketConfig: MarketConfig
  baseConfig: TradingConfig
}

export function calculatePositionSize(params: PositionSizingParams): number {
  const freeCollateral = params.totalCollateral - params.usedCollateral
  const reservePercent = 0.30 // Keep 30% reserve
  const availableForTrade = freeCollateral * (1 - reservePercent)
  
  // Get base size from market config or default
  const baseSize = params.marketConfig.positionSize ?? params.baseConfig.positionSize
  const leverage = params.marketConfig.leverage ?? params.baseConfig.leverage
  const requiredCollateral = baseSize * leverage * 0.10 // 10% initial margin
  
  // If not enough collateral, reduce position size
  if (requiredCollateral > availableForTrade) {
    return availableForTrade / leverage / 0.10
  }
  
  return baseSize
}
```

**Benefits:**
- Prevents over-leveraging
- Maintains safety buffer
- Dynamic sizing based on account state
- Supports multiple concurrent positions

**When to implement:** After Phase 1 validation, before increasing ETH position sizes.

## Troubleshooting

### Issue: ETH still trading at $50

**Check:**
1. Restart bot after config changes: `docker restart trading-bot-v4`
2. Verify config loaded: Check console logs for "Symbol-specific sizing"
3. Ensure symbol normalization: ETHUSDT → ETH-PERP (not ETH-USD)

### Issue: Position Manager using wrong size

**Root cause:** Position Manager calculates position amounts from on-chain data, not config.

**Behavior:**
- Execute endpoint uses `positionSize` and `leverage` from config
- Position Manager reads actual position size from Drift
- They're independent systems (by design for safety)

### Issue: Database shows wrong positionSize

**Root cause:** Database stores actual executed size, not config size.

**Expected:**
- Config: `ETH-PERP positionSize: 1`
- Database: `positionSize: 1.0` (matches execution)
- Drift on-chain: ~0.00029 ETH (~$1 notional)

All three should align. If not, config didn't load properly.

## Summary

Symbol-specific sizing enables:
- ✅ Multi-asset trading with different risk profiles
- ✅ Data collection strategies (ETH @ $1)
- ✅ Profit generation strategies (SOL @ $50)
- ✅ Cross-margin safety (minimal ETH exposure)
- ✅ Faster signal quality validation (more trades)

**Next steps:**
1. ✅ Config updated (DONE)
2. ✅ Execute endpoint integrated (DONE)
3. ⏸️ Create ETH alert in TradingView (USER ACTION)
4. ⏸️ Restart bot: `docker restart trading-bot-v4`
5. ⏸️ Monitor first ETH trade for correct sizing
6. ⏸️ Collect 20-50 trades with quality scores
7. ⏸️ Proceed to Phase 2 (ATR-based dynamic targets)