Targets and rebalancing

Portfolio targets

Your targets are the portfolio you meant to hold: a list of assets and the percentage of the book each one should be. A target set has a name, an optional description, and nothing else — no strategy engine behind it, no opinions of ours baked in. You write down what you decided, and Bitnora measures the real book against it.

One distinction before the mechanics. A model is a public, read-only template in the model library — you can start your plan from one by copying it, and every copied weight arrives unaffirmed until you confirm or change it. A plan is the commitment you sign: goal, contribution, allocation, rules. Targets are what this guide covers — a per-portfolio target allocation that drives drift and rebalancing for one book. Setting targets changes neither your plan nor any model.

Targets must total exactly 100%. The editor tells you how far off you are while you drag, and refuses the save until it balances, because targets that sum to 94% would silently produce a rebalance toward a portfolio that cannot exist. Two buttons do the arithmetic for you: equal-weight everything, or normalise what you have back to 100%.

One target set per portfolio

A portfolio has at most one applied target set. The same target set can be applied to several portfolios.

Shared target sets are shared

Editing a target set used by more than one portfolio changes all of them, and the editor says so. Duplicate it first if you want a variant.

Holdings outside the targets

Either add them to the targets at 0% or exclude them from the portfolio's drift maths. Until you do one or the other, a position with no target counts as fully drifted, which is the honest reading.

Drift

Drift is the distance between the book you hold and the book you wrote down, measured in percentage points rather than as a relative change. A holding with a 20% target sitting at 25% has drifted +5, not +25%.

The portfolio-level figure is half the total distance across every position — half, because every point one holding is over, another is under, and counting both ends would double the gap. Its complement is shown as an accuracy percentage, so a portfolio four points from its targets reads as 96% accurate.

Weights are measured across the investable sleeve: cash sits outside the target maths, and any holding you have explicitly excluded is removed from both the numerator and the denominator. If a target asset is only held through excluded positions, its target is suppressed and the rest are rescaled to fill the sleeve, so the percentages you are being measured against still add up.

Drift is on the dashboard as a watchlist, on the portfolio as a per-holding table with over and under labels, and — if you leave the alert on — in a notification when a position passes your threshold.

Tolerance

One number decides both when Bitnora says something and when it proposes a trade: the drift threshold in your notification settings. It defaults to 5 percentage points and can be set anywhere from 1 to 25.

A holding worth 20% of the portfolio with a 5-point threshold is left alone until it passes 25% or drops below 15%. Widening the band means fewer alerts and fewer orders; tightening it means more of both. It is one setting rather than a per-target-set one deliberately — a tolerance you have to remember to set in six places is a tolerance that ends up different in six places.

The threshold shapes an order draft in three ways:

• Nothing inside the band justifies a trade. If no holding has breached, the draft is deliberately empty rather than a list of small adjustments.
• A holding that has breached is taken all the way back to its exact target, not to the edge of the band.
• In-band holdings can still be sold to fund those buys — as few of them as possible, each one only as far as its own target, never past it.

The draft reports what that cost you: how many positions were left untouched, how much drift stayed in place because of it, and which in-band positions traded purely as funding. Separately, a trade whose value works out below one unit of your base currency is dropped rather than placed.

Order drafts and the order sheet

An order draft is generated from three things and three things only: your current holdings at current prices, your applied targets, and your tolerance. There is no cash-to-add field, no withdrawal, no contribution amount — it rebalances the sleeve that exists, and reports the small net cash shift that falls out.

Before you commit to anything you see the drift now, the drift after, the total value that would move, and a before-and-after allocation table. Every sell carries an estimated realised gain or loss from its average cost, or says plainly that the cost basis is missing and it cannot tell you.

The order sheet

Approving turns the draft into plain text: sells first, then buys, each with a quantity, a reference price, and an approximate value, preceded by a note about anything excluded or held back inside your tolerance.

Broker instructions:
1. SELL 12.3456 VTI near $250.00 for about $3,086.40
2. BUY  8.1200 VXUS near $61.40 for about $498.57

Review quantities and pricing in your broker
before submitting any order.

Copy the whole sheet or any single line. Then place the orders yourself, in your broker, where you can see the live quote and choose the order type.

When you come back, record what actually filled — quantities and prices are editable, and any line can be marked skipped. For a manually tracked portfolio those fills are written into your holdings and your activity history. For an IBKR portfolio they are not: the next broker sync brings the real fills in, and writing them twice would double the position.

Missing prices

An order draft needs a current value for every included holding. If one is missing the whole draft is refused and names the tickers — a partial rebalance is a wrong rebalance.

One open draft

Generating a new order sheet cancels any earlier open draft for that portfolio, because its quantities were sized against holdings that have since changed.

Paper books

Marking a draft executed does not fill a paper portfolio. Place those trades in the book directly.

Auto-invest: recurring contributions

An auto-invest schedule turns a recurring contribution into a priced buy list aimed at whatever is furthest below target. It never sells: it spends the money you are adding, so a holding already at or above its target simply gets nothing this time. Rebalancing by contribution is the cheapest kind of rebalancing there is.

Schedule

Weekly on a chosen weekday, or monthly on the 1st through the 28th so every month has your day. All schedules run at UTC midnight.

Needs targets

Auto-invest buys toward target weights, so the portfolio must have them applied.

Leftover cash

Anything too small to place — under one unit of your base currency, or a rounding remainder — is carried over and added to the next contribution rather than lost.

Expiry

A buy list stays actionable until the next scheduled contribution. If you never act on it, its cash rolls into the following one automatically.

When a list is ready you get a notification and the same kind of copyable order sheet, with each line marked for a broker or a crypto exchange. As with a rebalance, you place the orders and then record the fills. The schedule can be paused, resumed, or archived at any time; paused schedules keep their carried-over cash.