Journal / Guide · 6 min read
Rebalancing on autopilot, or with one click: start in an Alpaca paper account
How rules-based ETF rebalancing works on autopilot or with one click, the safety rails, and a step-by-step way to try it first in a free Alpaca paper account.
By Lowdraft. Published October 20, 2026.
Most investing plans do not fail because the rules were bad. They fail at the boring step: working out what to buy and sell, calculating share counts, placing eight or ten orders, and remembering to do it again next week. Rules-based portfolios make this step mechanical, which means a computer can do it. This guide explains how that works for Lowdraft Keels today, and how to try it without risking real money.
What the rebalancer does
- Reads your account. It connects to your brokerage account and reads your current positions and cash.
- Works out the target. It applies the Keel's rules to the latest prices and decides which ETFs the portfolio should hold and in what amounts.
- Compares the two. The difference between what you hold and what the Keel calls for becomes a list of orders.
- Trades in a sensible order. Sells first, waits for them to fill, reads the settled cash, then buys. If cash falls short, the buys are scaled down.
- Keeps costs in check. Thinly traded ETFs are bought in whole shares with limit orders that cannot stray far from the market price. Liquid ones are traded in dollar amounts. Tiny trades are skipped.
Three ways to run it
| Mode | What happens | Good for |
|---|---|---|
| Look first | Prints today's regime, the target weights and the full order plan, then stops. Nothing is sent. | Learning what the Keel would do, and checking it against your own view. |
| One click | Sends the plan to your account when you press the button in our desktop app (or run one command). | Staying in charge, with the work done for you. |
| Autopilot | Your computer runs it on a schedule, for example every Monday afternoon. The script re-checks the day, the time window and whether the market is open, so an extra or mistimed trigger does nothing. | People who want it done without having to remember. |
Safety rails that are on by default
- Turnover cap. If a rebalance would trade more than a set share of the account, it stops and tells you.
- Order-size limits and a typo guard. A price far from the last trade is refused.
- Stale-price and market-closed checks. It will not trade on old data or outside market hours.
- No double trading. Each order carries a unique ID for the day, so running it twice cannot send the same trade twice.
- Real money takes several deliberate steps. A paper account is the default. A live account needs the live setting switched on, the execute flag, and you typing a confirmation phrase.
- Your keys stay with you. They live on your computer, not on our servers, and we never hold your money.
Why start in a paper account
Alpaca offers a free paper-trading account that behaves like a real brokerage account but uses simulated money. That makes it the right place to find out how the pieces fit before anything real is at stake.
- Open an Alpaca account and switch to Paper Trading. Generate paper API keys. They only work on the paper account.
- Run the connection check. It confirms the keys work, shows which ETFs can be traded in fractional shares, and flags wide spreads or stale data.
- Look at the target weights. Compare them with the Keel in the Lab.
- Run the dry run. Read the order plan line by line.
- Send it to the paper account. Watch the orders fill.
- Schedule it. Let it run weekly on its own.
- Watch for two to four weeks. Compare what the account holds with what the Keel says it should hold, and how its return compares with the Lab's test.
The things worth checking: whether orders fill when expected, whether any thinly traded ETF is hard to get in and out of, whether your data feed is fresh enough, and whether the weights you hold match the Keel after each run.
What paper trading cannot tell you
- Paper fills are kinder than real ones. Simulated orders tend to fill more easily and closer to the quote than real orders do, especially in thin ETFs.
- It does not show tax effects. Rebalancing in a taxable account can create taxable events.
- A few weeks is a short sample. It tests the plumbing, not the strategy. Paper results do not predict real results.
Where this stands today
- Alpaca only. It is the only brokerage we support so far. Others may follow.
- Early tooling on your own computer. The rebalancer runs on your PC, so the PC has to be on and online at the scheduled time. The packaged Lowdraft app is planned.
- Built-in Keels first. The rebalancer currently runs a set of built-in Keels. Running any Keel you build in the Lab is on the roadmap.
- US accounts. Retirement accounts have their own rules, such as cash-account settlement, which can delay buys until the next rebalance.
If you want to see how it feels, a paper account is a low-cost way to find out, and you can switch it off at any time.
Join the waitlist to hear when the packaged version is ready.
Lowdraft is software, not an investment adviser, broker or bank. It does not manage money or hold your funds or keys. Paper trading uses simulated money and does not predict real results. Alpaca is a trademark of its owner and is named only to describe compatibility; no partnership is implied. Not investment advice. Investing involves risk, including loss of principal.