Successful Traders Size Their Positions - Why and How? by Basso Tom

Author:Basso, Tom [Basso, Tom]
Language: eng
Format: epub
Publisher: Enjoytheride.world LLC
Published: 2019-02-05T16:00:00+00:00

Also remember that the Average True Range is just that; AN AVERAGE! This means that on any given day the True Range could easily be more than the average. Think ahead to a volatile day and ask yourself how much movement in one day would get into your head and cause you to move away from being a disciplined trader and into an emotional state not conducive to trading. Back off that allocation when selecting your own percent target for each position, and give yourself some breathing room.

To keep things simple, I am going to use a 0.75% allocation of volatility to any one position. Here’s a simple theoretical example to show how simple this is:

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