Published: September 23, 2025

Last Updated: April 28, 2026

The Risk Rebalancer helps you reallocate funds across your positions, so you avoid over-investing in higher-risk trades while maintaining solid exposure to more conservative ones.

You can access the Risk Rebalancer from the My Portfolios tab.

Screenshot taken from a TradeSmith Platinum account on Apr. 28, 2026.

How to Use the Risk Rebalancer:

Step 1: Use the Portfolio drop-down menu to select the portfolio(s) you want to rebalance.

Screenshot taken from a TradeSmith Platinum account on Apr. 28, 2026.

Step 2: Review your portfolio value.

• Total Value: the sum of currently available capital of the long equity positions in the portfolio(s) plus any available cash.
• Current Securities: the value of the long equity positions, and does not include cash (latest close x share size).
• Cash to be invested: the cash balance available for investing.
• Dividends to be invested: dividends as cash available for investing.

Step 3: Decide whether to invest your portfolio’s available cash balance.

To edit the cash amount, click the "Cash Amount" field and enter the appropriate amount you want to invest.

If you don't want to include your cash balance, enter a zero in the "Cash Amount" field, and the values above will automatically update.

If you’d like accumulated dividends from your equities to be factored into rebalancing, check the "Include Dividends" box. This option applies only if you collect dividends as cash. If your dividends are automatically reinvested into more shares, this feature won’t apply.

Note: Platinum members have access to the "Equal Weight" Rebalance Method.

The "Reallocate Funds" toggle feature will reallocate funds from stopped-out positions (Long-Term Health Indicator Red Zone) to equities in the Long-Term Green Zone. This may require buying or selling shares to meet targets.

Step 4: Hit the green Rebalance button.

The tool provides three tabs: Overview, Rebalanced Results, and Change in Holdings.

The Overview tab displays how rebalancing for volatility affects the overall portfolio volatility quotient (PVQ), the volatility risk per position, and the risk allocation.

In the screenshot above, you can see the impact of rebalancing: our overall PVQ dropped from 16.39% to 13.65%. We’re now risking just under 1% of the trading capital per position. At the same time, we increased our exposure to medium and high-risk stocks while reducing our holdings in sky-high-risk securities.

Note: A higher PVQ after rebalancing indicates that more of your portfolio is in conservative positions, which lowers risk but also reduces potential returns.

Now, let’s check out the Rebalanced Results tab.

The Rebalanced Results tab provides all the information you may need about the portfolio(s) in their current and rebalanced states.

The tool displays the number of adjusted shares you should hold to balance risk equally across positions. In the example above, we’re risking 1.87% of trading capital per trade. This doesn’t mean we’re investing the same dollar amount in each holding—as shown in the Position Size columns.

For instance, the tool suggests investing about $3k in Astera Labs (ALAB), which carries a sky-high risk of about 70%. In contrast, Dynatrace (DT), with a medium-high risk of about 25%, suggests a position size of about $8,600.

FAQ: Why does the rebalanced portfolio suggest adding to Health Indicator Red Zone positions?

The purpose of the Risk Rebalancer is to spread risk evenly across all positions in your portfolio. It does not take into account the health status of your securities.

In the Actions column, you’ll find tools to fine-tune your results:

• Use the lock icon to freeze the share size of a position. For example, if you’re holding a Red Zone stock and don’t want to close the trade or increase its size, lock it.
• Use the ‘x’ icon to remove a position from the rebalancing calculations altogether—perfect if you’re planning to sell it.

And last—but definitely not least—is the Change in Holdings tab.

This tab shows the value of your current holdings, the share size, and whether you need to add or reduce shares.

• If displayed in green, it indicates the number of shares to add.
• If displayed in red, it indicates the number of shares to reduce.

And that’s the Risk Rebalancer in a nutshell. At the bottom of the Change in Holdings and Rebalanced Results tabs, you’ll find options to save your results as a new portfolio or to print and export them for reference.

Just remember—TradeSmith does not place trades on your behalf. Any adjustments suggested here must be executed through your brokerage account.

Need Help? 

Our Customer Success team is ready to assist: 

• Phone: 1-866-385-2076 (toll-free) 
• Email: [email protected] 

*Note—The tabs and features you see on your TradeSmith Finance site will vary based on your subscription(s) and subscription level(s).