Position sizing is an important component of trading. When considering what size of position to take, you should be aware of how much each market tends to fluctuate. This video explains how you can attempt to normalise your notional risk by adjusting for volatility rates of different markets. It also looks at how to use the Average True Range indicator (ATR) with Trading 212’s web app.
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many traders use it as confirmation
How many period should set in for trading time frame H1, & H4?
Thanks so much for this. I’ve tried employing the ATR method to my trading strategy but it’s been frustrating. I can’t determine what the ATR is for any pair. Is it strictly the whole numbers? Is it strictly the numbers after the decimal? Is it strictly the PIP position? I can never definitively tell.
You take the pips from the ATR number (so many pips for amount of time) x position size (put in lotsize calculator) = number is 1%. You can do that x3 if you want to risk 3% of your account. If you do that times 2, you risk 2% of your account.
This way if you put your stoploss on the value provided from ATR x position size you will risk whatever you have agreed upon in your trading plan.
I opened a demo account and quadrupled my money in around 3 weeks which seems very unrealistic even though I have never traded before
lucky sod
Which are that crossover lines??
Moving averages
I think it would be beneficial for all of us watching (as we are all here to learn) if you guys did a daily routine for a Day Trader as you are the professionals and have been there and done it . Perhaps even show us some Top Down analysis or some psychological tips for trading.
I would like to know what anyone else has to say or thinks about this. If anybody agrees, drop me a like on the comment
Hey Max, thanks for suggesting this. We’ll take a note. You may check out these videos elaborating on different topics revolving around the trading psychology – http://www.youtube.com/playlist?list=PL_qZbVTmPuY9SJKocBQ_gCbijdPwQTDPm. Enjoy. 🙂
I’m still not tracking… ATR and how to use it for placing trade value (risk). I thought the ATR would help us find volatility and thus a profitable trade that is worth the risk? In other words look for a trade with a current low ATR and typically higher volatility will follow.
True trader will never reveal how he/she is staying profitable. Everything else is a bunch of bull.
I don’t get it.
Where’s my boy David Jones gone? It’s not the same without him.
Correct methodology but wrong application! ATR should not be used to determine position size because this leads to huge positions in a low vol enviorment which does change greatly over a very short time period. Correct application is to use ATR to determine stop loss placement to avoid being stopped out in a high vol market or stock.
below par video
Based on your explanation, you use ATR to determine position size only if you are trading multiple commodities/pairs?
Alot of people do not understand the size of position and how you are using it. If you are using ATR that way, then you have to calculate in leverage. The leverage is different from currency to crude oil to lets say heating oil.
thanks
so according to this video you wouldn’t suggest that the trader divide his money into equal shares and invest those shares on different markets, am I correct? let’s say for example dividing your account of 10 k to 5 and investing 2 k in each market regardless of ATR would be wrong, yes?
Hi I really like your videos and I trust the info you give. I’ve trying to find videos that explain the ATR Percent. Can you show us that? Thanks
Not your best video. Too hard to follow.
How about if theirs 31 days in a month would it be 22 then?