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Chris Hengeveld writes:
> I always base it on the difference between entry and the stop. I
> am investigating adjusting this amount based on the chart pattern
> traded. Some patterns, being less risky than others, should let
> me risk a larger amount than those chart patterns that are more
> risky.
Interesting.
I do the same as you, but rather than changing my risk % or what the
risk is based on, I change my stop based on some form of volatility.
(Which, of course, changes how many shares I buy.)
I'm playing with 2 * a 5 day exponentially smoothed moving average of
the TR. (Something akin to 2 * Mov(ATR(1), 5, e)) I'm finding that
it is a bit loose though and go to 1.5 instead of 2 there.
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