📏 Yesterday, we wrote about the 1–2% rule — today, the next level: adjust size according to volatility.
Concept:
1️⃣ Keep risk the same (1–2% of your account), but set position size based on volatility
2️⃣ ATR (Average True Range) is a simple tool — it shows an asset’s “normal daily range”
3️⃣ More volatile = smaller position; calmer phase = slightly larger — dollar risk stays the same
Example: today’s BTC range is $76.3K–$77.2K (Yahoo) — if the stop distance doubles, halve the size to maintain 1% risk.
Fixed lots are a common position-sizing mistake. Risk stays constant, size stays flexible. ⚖️
$BTC
#PositionSizing #ATR #RiskManagement
Concept:
1️⃣ Keep risk the same (1–2% of your account), but set position size based on volatility
2️⃣ ATR (Average True Range) is a simple tool — it shows an asset’s “normal daily range”
3️⃣ More volatile = smaller position; calmer phase = slightly larger — dollar risk stays the same
Example: today’s BTC range is $76.3K–$77.2K (Yahoo) — if the stop distance doubles, halve the size to maintain 1% risk.
Fixed lots are a common position-sizing mistake. Risk stays constant, size stays flexible. ⚖️
$BTC
#PositionSizing #ATR #RiskManagement