The Average True Range (ATR) is a measurement that professional traders use to adjust their position sizes to normalize risk across all instruments.
Normalizing risk allows you to look at Gold the same way you look at Sugar or AMZN for that matter – they are all the same percentage risk to your portfolio.
Don’t make the mistake of trading with “tiers” as no one optimizes their trading for the number of shares. You are trading like an amateur if you are trading a security risking $2 if the daily volatility is $6.
Downtiming to intraday time frames is a foolish endeavor and even in doing so, you can’t change the fact that the daily vol at $6 is too big for what you’re trying to do at $2.
After you bake-up, get Tony Saliba’s new options trading book – FREE
Latest posts by Michael (see all)
- The Three Best Poker Rules You can Incorporate into Your New Trading System - November 21, 2017
- The Clever Way to Decode Market Data to Win Like a Casino - November 20, 2017
- Why it’s Important to Remain Emotionally Balanced for Superior Risk Adjusted Returns - November 17, 2017